Japanese financial giant SBI Holdings has partly terminated cryptocurrency mining in Russia due to geopolitical uncertainty and the crypto winter.
SBI Holdings suspended mining operations in Russia’s crypto mining-rich region of Siberia, citing reasons like the Russia-Ukraine conflict and the ongoing bear market, Bloomberg reported on Thursday.
The Japanese online brokerage shut down the Siberian mining operations shortly after Russia started a military intervention in Ukraine on Feb. 24, a spokesperson for the firm reportedly said.
The termination contributed to SBI’s crypto asset business reporting a pretax loss of 9.7 billion yen ($71 million) in Q2 202. As a result, the Sumitomo Mitsui Financial Group-backed group recorded a 2.4 billion yen ($17.5 million) in net losses, reportedly posting its first quarterly loss in a decade.
The reports on SBI’s mining suspensions in Siberia correspond with the public mining information of SBI’s crypto mining subsidiary SBI Crypto. According to data from the blockchain explorer BTC.com, SBI Crypto’s mining hash rate plummeted about 40% from 5,600 petahashes per second (PH/S) in mid-February to 3,300 PH/S on Aug. 18, 2022.
A spokesperson for SBI told Cointelegraph that the company has taken down its entire mining operation in Russia so far. "The SBI Group has already stopped all mining in Siberia. And we are not mining in the rest of Russia," the representative noted.
SBI reported has no other crypto business in Russia, and plans to keep operating its Moscow-based commercial banking unit, SBI Bank.
As previously reported, Russia emerged as one of the world’s biggest crypto mining countries last year, becoming the third largest BTC hash rate producer after the United States and Kazakhstan. The country quickly lost its hash rate leadership as China returned to the top three mining nations in early 2022, while many miners opted to avoid operations in Russia due to geopolitical uncertainty.
In April 2022, the U.S. Treasury Department imposed sanctions on BitRiver, Russia’s largest crypto data center provider, which had been involved in major imports of crypto mining devices from other countries. Some U.S. mining companies like Compass Mining subsequently sought to liquidate $30 million in crypto mining hardware in Siberia to avoid sanctions.
Disclaimer: This article was updated to reflect that SBI has stopped all mining operations in Russia.