• Russia is creating its first mutual investment fund dedicated to financing cryptocurrency mining operations.
• The fund will be available to qualified investors and will finance the acquisition of coin minting equipment.
• Interest in crypto mining has increased significantly in the past year, leading to negotiations on the organizing of a number of funds related to investments in industrial mining.
Investment Fund Focused on Crypto Mining to Be Created in Russia
Russia is creating its first mutual investment fund dedicated to financing cryptocurrency mining operations. The fund will be available to qualified investors and will finance the acquisition of coin minting equipment. It will operate as a venture fund for the purchase of mining hardware through a special entity which will then lease the equipment.
Requirements for Investors
The new closed-end fund will be established by Finam Management, which will register it with the specialized depository in March. Only qualified investors will have access, with a minimum threshold of 300,000 rubles (almost $4,000). The company intends to raise 500 million rubles (over $6.6 million) before incorporating the leasing firm, Finam CEO Vladislav Kochetkov explained. Part of the money will be used to buy mining machines and the rest will be spent to pay for electricity and maintain the fund.
Crypto Mining Regulations
Management companies have previously created mutual funds focused only on businesses developing blockchain technology. In 2021, some tried to register funds for cryptocurrencies and their derivatives but were prohibited by Bank of Russia due to foreign crypto assets being included in mutual funds. However, after a yearlong sanctions period there is speculation that at least some crypto-related activities such as mining may get approved by Bank of Russia due to softer regulations regarding them now than before.
Increase in Interest from Banks & Investment Companies
Bitriver reported that since Q4 2022 there has been an increase in interest from largest Russian banks, investment companies and management firms towards crypto mini g projects leading them into final stages of negotiations on organizing funds related investments into industrial mining projects . Alexander Baryshnikov from Bitriver said: “We are in the final stages of negotiations on the organizing of a number of funds related to investments in industrial mining” .
The establishment of an investment fund focused on cryptocurrency mining shows that there is growing support for this industry among Russian banks, investment companies, and management firms despite continued regulatory uncertainty surrounding cryptocurrencies overall. As more players enter this space it’s likely that we’ll see even more development taking place within this sector over time