Irkutsk is known to be a hotspot for miners both domestic and international in recent times, with the activities stepping up after China’s mining crackdown last year.
Majority of Japanese players from various sectors have invested heavily in overseas crypto mining operations, mainly due to the prohibitively high costs of mining in Japan. According to a new report, Washington wants Japanese regulators to convince the domestic crypto exchanges and miners to cut all ties with Russia.
The Financial Times stated that American “diplomats” believe “several” Japanese crypto exchanges are “still running in Russia,” according to unnamed “people close to the situation.”
According to “two people familiar with the matter”, the diplomats reportedly want Japanese miners to end the crypto mining operations that are operating in the Irkutsk Oblast in Southern Siberia.
Overseas mining operations by most Japanese operators generally have kept the exact location a secret. However, a number of East Asian investors are known to have established mining centers in Central Asia, with some thought to be working in Siberia.
As previously reported in March, both Japan’s top financial regulator, the Financial Services Agency (FSA), and the Ministry of Finance told the country’s exchanges to suspend all transactions with sanctioned Russians and Belarusians.
However, Washington now wants the exchanges to cease all Russia-related operations.
The Financial Times, quoted the “former head” of an unnamed exchange confirmed that Japanese crypto exchanges had “encountered a recent intensification of pressure to relocate any mining or back-office operations out of Russia.”
But, the former executive added, “at least one exchange” has “decided to maintain its business” in Russia and was “skirting the regulation by setting up a shell company in Singapore and routing payments via that.”
The media outlet quoted that the FSA representatives responded by “renewing demands” that exchanges “cut any surviving relationships” with Russia, “people close to three exchanges” confirmed.
The media outlet has also stated that it had contacted a number of Japanese exchanges, who variously claimed not to “have any operations in Russia.”
“People close to the situation” were quoted as to say that some Japanese exchanges and crypto miners had “evolved a complex network of subsidiaries to continue working with their Russian operations.”