It’s well-known that SBI Holdings, Japan’s biggest online brokerage, is one of Ripple’s lead partners. The said firm is reportedly going to shut down its crypto mining operations in Russia. Notably, the Chief Financial Officer Hideyuki Katsuchi announced the plan to sell machinery, and withdraw operations from the nation earlier this week.
Talking to Bloomberg News, an SBI spokesperson said,
Russia’s invasion of Ukraine has created uncertainty over the prospects of the mining business in Siberia, while crypto’s global market rout has rendered it less profitable to mine tokens.
State of Crypto Mining in Russia
Last year, authorities had imposed a crackdown on Bitcoin mining in China. Resultantly, miners started flocking from the hub to different countries, and Russia was one such destination. In fact, low-cost power from natural gas and hydropower dams made the said nation even more attractive to miners.
Per reports, in August last year, Russia accounted for about 11% of the global processing power used for minting new units of Bitcoin, according to the Cambridge Centre for Alternative Finance, making it the third-biggest mining hub behind Kazakhstan.
In fact, per the latest numbers, electricity consumption by Russian crypto miners has spiked by 20 times in 5 years. Per experts, the nation possesses the capacity to cater to a much larger demand.
However, the sanctions imposed on Russia by other nations, including the US has made the landscape unstable. Compass Mining, for instance, sought to liquidate $30 million in hardware in Siberia to avoid sanctions back in April.
Per the SBI spokesperson, the company suspended mining in Siberia soon after the war began. Resultantly, the said move impacted Ripple’s lead partner’s financial health. Reportedly, the company’s crypto asset business registered a pretax loss of roughly $72 million in Q2 this year.
The spokesperson further told Bloomberg,
SBI has yet to decide by when it will complete the withdrawal from Siberia. The company has no other crypto business in Russia, and it intends to keep operating SBI Bank LLC, its Moscow-based commercial banking unit.
How have miners been faring?
Bitcoin miners, on their part, have been dumping their HODLings over the past few months. Last month, public miners cumulatively let go of over 6200 coins, which accounted for 158% of their Bitcoin production in July. Resultantly, July was the third month in a row where miners sold more than 100% of Bitcoin production.
As chalked out in a recent article, selling more than what is being produced single-handedly points to the fact that miners are under pressure at the moment. And with the market crash on Friday, looks like their condition might worsen going forward.