Russian Firm Launches Crypto Mining Mutual Fund
Russian investment management firm Finam Management has launched a fund to finance crypto mining operations in the country. According to Russian business outlet Kommersant, the fund will be available only to qualified investors who can invest a minimum of 300,000 rubles (approximately $4,000) and hopes to raise 500 million rubles (over $6.6 million) to establish an LLC that will acquire mining hardware and lease them. The rest of the money invested in the fund will be used to pay for electricity and other operating costs and service the fund.
Russian investment management firm Finam management has unveiled a new fund intended to finance crypto mining operations in the countryhttps://t.co/ojIF3IB4dJ
— crypto.news (@itscrypto_news) March 3, 2023
Mining Profits in Russia
However, the report brought attention to the lack of regulation in the crypto industry and the hostile stance of the Central Bank of Russia towards crypto. The central bank recently warned against legalizing crypto, stating that the move could undermine the country’s financial system. The fund’s launch is still subject to regulatory approval in Russia, but industry observers believe that there is a high chance the fund will be approved, and the central bank will soften its attitude towards crypto mining.
The profitability of mining at current prices for bitcoin equipment and the exchange rate can reach 50% every year, depending on electricity costs. However, market participants noted the risks associated with the purchase of equipment, stating that they become obsolete and lose their effectiveness in relation to new supercomputers, which can significantly affect the return on investment.
Mining Mutual Funds
Vladislav Kochetkov, head of Finam Group, said that the mutual fund rules would be sent for approval to a specialized depository after March 1. BitRiver, a company that provides services for the placement of mining equipment, noted that there had been an explosive increase in interest in the company from major banks, investment companies, and the U.K.
Pending Regulatory Approval
The fund’s launch will be closely watched by industry players, as it could pave the way for other investment management firms to enter the crypto-mining sector in Russia. However, the lack of regulatory clarity remains a major concern, and investors must be aware of the high rewards and risks associated with investing in the crypto-mining sector.
