The US Department of the Treasury is targeting companies, oligarchs, and bitcoin miners operating in Russia for the first time ever as the country’s conflict on Ukraine enters its third month.

Treasury officials announced Thursday that the department is now pursuing the Russian commercial bank Transkapitalbank, as well as a network of more than 40 individuals, including oligarchs like Konstantin Malofeyev, for allegedly assisting the Kremlin in evading economic sanctions.

In a statement, Treasury undersecretary for terrorism and financial intelligence, Brian Nelson, said:

“Treasury has the authority and will pursue those who dodge, seek to evade, or aid in the evasion of US sanctions against Russia, as they contribute to Russian President Vladimir Putin’s barbaric war of choice.”

G20 Meeting Walkout

The penalties were announced when Russian officials were in Washington for Group of 20 meetings. On Wednesday, when Russia’s finance minister spoke, several officials, including Treasury Secretary Janet L. Yellen, walked out of a meeting.

British and Canadian officials also took part in the boycott, emphasizing the seething tensions at the summit intended to discuss global concerns like mounting debt and a probable food crisis.

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Russia: World’s 3rd-Biggest Bitcoin Mining Hub

The Treasury Department slapped penalties on entities engaged in the virtual currency mining industry in Russia. According to Cambridge University data, Russia is the world’s third-largest bitcoin mining destination.

It targeted BitRiver’s holding company and 10 of its subsidiaries in Russia, stressing that the US was dedicated to ensuring that no asset became a tool for Putin to mitigate the impact of sanctions.

Crypto total market cap at $1.88 trillion on the daily chart | Source: TradingView.com

BitRiver was created in 2017 and, as the name implies, uses hydroelectric energy to power its mining farms. According to its website, the mining company employs approximately 200 full-time employees across three offices in Russia.

“Because of its energy resources and frigid temperature, Russia has a competitive advantage in crypto mining. However, mining enterprises rely on imported computer equipment and currency payments, making them susceptible to penalties,” the statement reads.

Sanctions Versus Oligarchs And Transkapitalbank

Transkapitalbank, the bank named in the new sanctions, is believed to have been selling its own proprietary payment system to banks in Asia and the Middle East as a Russia-friendly alternative to SWIFT, the international payment system from which Russia was barred at the outbreak of the war.

The US government has long accused oligarchs such as Malofeyev of being one of the primary financiers of Russian separatists in Crimea. He was initially named by the Obama administration in 2014, following Russia’s annexation of Crimea.

Meanwhile, the US State Department has placed visa restrictions on more than 600 people in an effort to promote accountability for human rights abuses and violations, Secretary of State Antony Blinken announced in a statement, prohibiting them from traveling to the US.

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Featured image from Insurance Journal, chart from TradingView.com