SBI to Shutdown Crypto Mining in Russia After ¥9.7 Billion Loss

• The largest online brokerage in Japan is halting its mining operations in Russia.
• Chief financial officer intends to sell the equipment soon.
• For the three months, the company’s crypto asset division reported a pretax loss of 9.7 billion yen ($72 million).

The largest online brokerage in Japan, SBI Holdings Inc., said that it would stop operating cryptocurrency mining facilities in Russia. This revelation came via a report in Bloomberg earlier today, where a spokeswoman said mining tokens have become less lucrative due to the collapse of the global cryptocurrency market plus Russia’s invasion of Ukraine.

Hideyuki Katsuchi, chief financial officer at SBI, intended to sell the equipment and leave earlier this week. According to the representative, SBI Holdings stopped mining in Siberia shortly after the conflict started.

For the three months ending June 30, the company’s crypto asset division reported a pretax loss of 9.7 billion yen ($72 million). The rep added that the organization, supported by Sumitomo Mitsui Financial Group Inc., swung to a net loss of 2.4 billion yen, its first quarterly loss in ten years.

After Beijing’s crypto mining ban in May drove them out of China, miners went to Russia, partly to take advantage of low-cost electricity from natural gas and hydroelectric dams that have made it a popular destination alongside North America.

But in April, the US Treasury Department sanctioned BitRiver, a cryptocurrency mining business with headquarters in Switzerland, because of its operations in Russia. Soon after, American company Compass Mining Inc. tried to sell $30 million worth of equipment in Siberia to dodge penalties.

Previously, the International Monetary Fund had warned that cryptocurrency mining would give Russia a method to get over broad economic sanctions by the US and other western nations. Sanctioned countries might use their energy resources to power mining while earning money from transaction fees.