Leading Japanese online broker SBI will exit Russia's crypto mining sector

Leading Japanese online broker SBI will exit Russia’s crypto mining sector

SBI was one of the first Japanese financial institutions to enter the digital asset space; however, the negative developments that have occurred this year have resulted in a pre-tax loss of 9.7 billion yen ($72 million) from its cryptocurrency business in the second quarter. At the same time, the group registered a net loss of 2.4 billion yen (over $15.8 million), which was the first time it had done so in a decade.

According to Katsuchi, the Japanese brokerage company temporarily halted its mining operations in Siberia not long after the outbreak of hostilities in Ukraine; nevertheless, the company has not yet determined a date by which it would completely depart from Siberia. The CEO clarified that the financial organization does not operate any other cryptocurrency-related businesses in Russia; nevertheless, the company does want to keep its Moscow-based commercial banking unit, SBI Bank, operational. The move comes after reports surfaced in July that American diplomats encouraged authorities in Tokyo to put pressure on Japanese crypto exchanges and miners to cut relations with Russia. This step comes after those reports.

The International Monetary Fund (IMF) issued a report in April in which it expressed concern that the mining of cryptocurrencies may provide Russia and other nations that are subject to sanctions, such as Iran, with a means of evading the economic and financial restrictions imposed by the United States and its allies. These nations can make use of their energy resources to power mining facilities, thereby increasing their earnings from the mining of cryptocurrencies and the fees associated with their transactions.

According to a new study, the amount of electricity used in the cryptocurrency mining industry in Russia has been steadily increasing over the course of the previous few years, marking an over 20-fold growth during the period of five years beginning in 2017. Irkutsk, which is located in Siberia and has some of the most affordable rates for electricity in the entire country, is one of the most desirable locations for miners, right up there with the capital city of Moscow, where they can take advantage of Moscow’s well-developed energy and other infrastructure.

SBI Holdings, the largest online brokerage in Japan, is winding down its cryptocurrency mining operations in the Russian Federation. These operations were located in Russia. The financial company has stated that it intends to sell its equipment and withdraw from the market as a result of the growing unpredictability over the future of investments of this kind brought about by the prolonged crisis in Ukraine, as well as the declining revenues from mining.

The SBI Broker company from Japan is going to finish withdrawing from the Russian mining industry.

When China began to crack down on the cryptocurrency business in May of 2021, Russia became an appealing location for cryptocurrency miners as a result of its access to low-cost power and favorable climatic conditions. Bitcoin mining, along with other Russian businesses, has been impacted negatively as a result of sanctions implemented as a result of Moscow’s decision to launch an attack on Ukraine this year.

In the spring of this year, the United States Treasury Department went after Bitriver, a company based in Switzerland that is one of the major mining data-center operators and has a considerable presence in Russia. Following this, the American company Compass Mining attempted to circumvent western sanctions by selling $30 million worth of mining equipment that had been installed in Siberia.

Russia’s invasion of Ukraine has created uncertainty over the prospects of the mining business in the energy-rich region, while the downturn in the crypto market has made it less profitable to mint digital currencies, according to a representative of SBI, the largest online broker in Japan, who spoke to Bloomberg. Russia’s invasion of Ukraine has also caused uncertainty over the prospects of the mining business in the rest of the country. Hideyuki Katsuchi, the company’s Chief Financial Officer, revealed that the organization intends to sell its equipment and depart from Russia.

SBI was one of the first Japanese financial institutions to enter the digital asset space; however, the negative developments that have occurred this year have resulted in a pre-tax loss of 9.7 billion yen ($72 million) from its cryptocurrency business in the second quarter. At the same time, the group registered a net loss of 2.4 billion yen (over $15.8 million), which was the first time it had done so in a decade.

According to Katsuchi, the Japanese brokerage company temporarily halted its mining operations in Siberia not long after the outbreak of hostilities in Ukraine; nevertheless, the company has not yet determined a date by which it would completely depart from Siberia. The CEO clarified that the financial organization does not operate any other cryptocurrency-related businesses in Russia; nevertheless, the company does want to keep its Moscow-based commercial banking unit, SBI Bank, operational. The move comes after reports surfaced in July that American diplomats encouraged authorities in Tokyo to put pressure on Japanese crypto exchanges and miners to cut relations with Russia. This step comes after those reports.

The International Monetary Fund (IMF) issued a report in April in which it expressed concern that the mining of cryptocurrencies may provide Russia and other nations that are subject to sanctions, such as Iran, with a means of evading the economic and financial restrictions imposed by the United States and its allies. These nations can make use of their energy resources to power mining facilities, thereby increasing their earnings from the mining of cryptocurrencies and the fees associated with their transactions.

According to a new study, the amount of electricity used in the cryptocurrency mining industry in Russia has been steadily increasing over the course of the previous few years, marking an over 20-fold growth during the period of five years beginning in 2017. Irkutsk, which is located in Siberia and has some of the most affordable rates for electricity in the entire country, is one of the most desirable locations for miners, right up there with the capital city of Moscow, where they can take advantage of Moscow’s well-developed energy and other infrastructure.

 

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