Japanese financial giant SBI Holdings has partially ended cryptocurrency mining in Russia due to geopolitical uncertainty and crypto winter.
SBI Holdings has halted mining operations in the crypto-mining region of Siberia, citing reasons such as the conflict between Russia and Ukraine and an ongoing bear market, Bloomberg reported Thursday.
The Japanese online brokerage firm reportedly shut down mining operations in Siberia shortly after Russia began a military intervention in Ukraine on February 24, a company spokesperson reportedly said.
The termination contributed to the SBI crypto asset firm reporting a pre-tax loss of 9.7 billion yen ($71 million) in the second quarter of 202. As a result, the group backed by Sumitomo Mitsui Financial Group posted a net loss of 2.4 billion yen ( $17.5 million), reportedly. It posted its first quarterly loss in a decade.
The reports on the SBI Siberia mining suspension are consistent with the public mining information of SBI Crypto of the SBI’s Crypto Mining Branch. According to data from blockchain explorer BTC.com, the SBI Crypto mining hash rate has dropped by nearly 40% from 5,600 petahashes per second (PH/S) in mid-February to 3,300 PH/S on August 18, 2022.
Six-month mining hash rate for SBI Crypto. Source: BTC.com
An SBI spokesperson told Cointelegraph that the company has halted its entire mining operation in Russia for now. The representative noted that “SBI Group has already stopped all mining operations in Siberia. We do not mine in the rest of Russia.”
SBI said it does not have another crypto business in Russia, and plans to continue operating its Moscow-based commercial banking unit, SBI Bank.
Related: Russia appears to be preparing to mine Bitcoin with glow gas
As previously reported, Russia emerged as one of the world’s largest crypto miners last year, becoming the third largest producer of BTC hashrate after the United States and Kazakhstan. The country quickly lost its lead in the hash rate as China returned to the top three mining nations in early 2022, while many miners chose to avoid operations in Russia due to geopolitical uncertainty.
In April 2022, the US Treasury imposed sanctions on BitRiver, the largest provider of crypto-data centers in Russia, which was involved in significant imports of crypto-mining hardware from other countries. Some US mining companies such as Compass Mining later sought to liquidate $30 million from Siberian crypto mining hardware to avoid sanctions.
Disclaimer: This article has been updated to reflect that the SBI has halted all mining operations in Russia.