American crypto-mining outfit Compass Mining is selling off about $30 million worth of hardware in Siberia after the US government sanctioned rival BitRiver over its Russian operation, Bloomberg reported on Friday.
Compass is seeking buyers in Russia for equipment with 12 megawatts of capacity, CEO Whit Gibbs told Bloomberg, adding that he expects to recover most of the value and will distribute the proceeds to about 2,000 clients who own the gear. The Austin, Texas-based company operates data centers that host equipment owned by his customers.
The Block reported on Wednesday that the US Treasury's Office of Foreign Assets Control added Russia-based cryptocurrency miner BitRiver and 10 subsidiaries to its Specially Designated Nationals list. "By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources," the Treasury's announcement said. "The United States is committed to ensuring that no asset, no matter how complex, becomes a mechanism for the Putin regime to offset the impact of sanctions."
Gibbs said, “I understand the sanctions; in this case the punishment is outsized for American miners,” Bloomberg reported.
Still, the Texas crypto business is booming, as Gibbs estimated that it may add 3,500 to 5,000 megawatts of capacity within two years, including at Compass sites. “The majority of our expansion is going to be in Texas,” Gibbs said.