The U.S. Office of Foreign Assets Control (OFAC) hit Rusal with sanctions in April 2018. At the time, the U.S. Treasury Department dubbed Rusal majority shareowner Oleg Deripaska a “Designated Russian Oligarch”, thereby sanctioning the firm.

A Russian aluminum plant is pivoting to bitcoin mining after U.S. sanctions forced the plant to shut down in 2018. Russian aluminum giant Rusal is leasing its Nadvoitsy Aluminum Plant, located in the northwest region of Karelia, to a crypto startup called the Russian Mining Corporation (RMC), according to Russian news site RBC.

RMC is renting out a small part of the plant and plans to use the plant’s cheap power and expansive footprint to install miners in order to take over a large portion of the global bitcoin mining market. In cooperation with U.K.-based exchange and wallet provider Cryptonex, founder Dmitry Marinichev said the company plans to capture 20 percent of the current bitcoin mining market. RBC reports Russia currently holds about 10 percent of the world’s bitcoin mining capacity.

“Now the Rusal plant is unprofitable, the electricity supplied to it is practically not being utilized, and people living in the single-industry town near the plant have nowhere to work”, Marinichev told RBC, “Our idea is to redesign the plant and sell its computing power as a service, that is, provide an IT service.”

Under the agreement, Cryptonex transferred 42 million of its exchanges native token CNX to the mining firm, worth an estimated $85 million at press time according to CoinMarketCap. The firms also came will also fund the purchase of mining equipment for the new facility, Crytponex said in a release.

Russian Nuclear Scientist Gets $7,000 Fine for Mining Bitcoin at Work

One of three scientists caught illegally bitcoin mining at a Russian nuclear lab has been fined 450,000 rubles, or $7,000.

As reported in the Moscow Times Tuesday, Denis Baykov was handed the penalty by a jurisdictional city court for accessing the lab’s supercomputer to illegally mine the world’s top cryptocurrency by market valuation.

Located in Sarov, Russia, the top-secret lab was where the first Soviet nuclear bombs were manufactured in the late 1940s. It remains home to some of Russia’s most powerful computers.

The mining trio was first exposed last February and promptly handed over to the Federal Security Service.

Using the proof-of-work consensus mechanism, bitcoin harnesses miners to record transactions and secure the the blockchain with powerful energy-intensive computers. Mining power is measured in hashes per second.

According to today’s report, Baykov, along with the two other lab employees, used specially designed software to mask mining on the lab’s computer, which can conduct transactions up to 1,000 trillion operations per second, or one petaflop. Hashes per second do not translate into operations per second, however.

With the price of bitcoin sitting around $8,000 per coin, one of the three employee’s lawyers, Alexei Kovalyov, hinted at the fine being very small compared to the probable payoff:

“I can say one thing for sure: they were not detained on the first day they began to mine.”

Court verdicts for the other two scientists have not yet been reached.

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