SBI Holdings to Shut Down Crypto Mining Operations in Russia

Japanese financial services giant SBI Holdings is planning to shut its crypto-mining operations in Siberia, Russia, Bloomberg reported on Friday. SBI Chief Financial Officer (CFO) Hideyuki Katsuchi said the planned move was triggered by Russia’s ongoing war with Ukraine and the recent bear market.

SBI Shuts Crypto Mining Operations in Russia

According to Katsuchi, the ongoing war has created uncertainty over the SBI mining business in the country while the recent crypto market crash has made mining of coins less profitable.

Katsuchi stated that SBI had already suspended its mining operations in Russia soon after the war. He further noted that it added to the company’s crypto business reporting a pretax loss of $72 million in the second quarter of 2022. In the same period, the financial giant recorded a net loss of $17.5 million, its first quarterly loss in 10 years. 

The CFO stated that SBI has not decided on when to leave Russia. However, he noted that the company has no other crypto business operating in the country. 

Miners Exit Russia

After China banned crypto mining last year, Russia became the third largest crypto-miner country in the world. In August 2021, the Cambridge Centre for Alternative Finance reported that Russia accounted for around 11% of the global processing power used for mining new bitcoins.

Following the Chinese mining crackdown, many top crypto mining firms migrated to Russia due to its cold climate and low energy prices. However, these miners are now leaving the country due to financial sanctions imposed on the country by the U.S. and other nations amid the ongoing war with Ukraine.

Governments have also pressured several crypto miners to cut ties with Russia, as they believe crypto mining can help Russia evade sanctions. 

Meanwhile, in April, the U.S. government imposed sanctions on Swiss-based cryptocurrency mining company BitRiver and 10 subsidiaries in connection with their ties to the Russian economy.