On Wednesday during a Digital Economy Council meeting at Russia’s parliament’s upper house, Yuri Pripachkin, president of the Russian Association of Cryptocurrencies and Blockchain (RACIB), announced that Russia now has 75,000 crypto mining firms, the Russian Prime Business News Agency reported.
Cryptocurrency mining, or crypto mining, is the process of verifying the existence of a digital cryptocurrency and adding it to the blockchain digital ledger.
Last year, the most popular digital currency, Bitcoin, went on a wild ride with its value soaring more than 1,500 percent from $1,000 to almost $20,000 before before a massive drop in December. Economists were wary of the market surge and called it an extraordinary speculation bubble.
Cryptocurrencies exist without the backing of a central bank or government and while the underlying mechanism which supports it — blockchain technology — has been heralded for a myriad of positive uses, Bitcoin itself has long existed under a shadow of suspicion for its association with criminal ventures, including money laundering and drug trafficking.
Russia has openly embraced cryptocurrency activity. In January, Russian President Vladimir Putin authorized officials in Moscow to create a digital currency, or “cryptoruble,” that uses technology similar to bitcoin and could evade sanctions, according to reports.
The Russian State Duma, the lower house of the Russian parliament, is also slated to adopt three bills aimed at legalizing crypto transactions in its upcoming fall legislative session. According to RACIB, Russia’s crypto mining industry now employs 350,000 people overall.
But significant controversy continues to swirl around cryptocurrency mining. Environmentalists say it uses exorbitant amounts of computer server energy to verify each coin. Economists say it diverts time, and capital from other, more productive activities.
Another issue of major contention — recent allegations that bitcoin was used to undermine the 2016 U.S. presidential election.
Last month, as part of special counsel Robert Mueller’s investigation into Russian election meddling, Deputy Attorney General Rod Rosenstein unveiled an indictment charging 12 Russian intelligence officers with hacking offenses including breaking into the computer networks of the Democratic National Committee and Hillary Clinton presidential campaign in 2016.
The indictment noted that bitcoin played a critical role in the Russian operative’s ability to hide payments they made in their hacking scheme.
“The use of bitcoin allowed the Conspirators [Russian intelligence officers] to avoid direct relationships with traditional financial institutions, allowing them to evade greater scrutiny of their identities and sources of funds,” the indictment said.
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