As per a report by Russian business news publication Kommersant, Finam Management, an investment management firm in Russia, has recently announced the launch of a new fund aimed at providing funding for cryptocurrency mining activities within the country. The fund is exclusively open to eligible investors who are capable of investing at least 300,000 rubles (roughly equivalent to $4,000).
A mutual fund dedicated to cryptocurrency mining in Russia is seeking to raise 500 million rubles (approximately $6.6 million), according to a report by Kommersant. The fund plans to establish an LLC to purchase mining equipment and lease it out, with the remaining funds to cover operational expenses, such as electricity costs, and service the fund. The report highlights the potential rewards and risks of investing in the crypto mining sector and notes the absence of regulation in the industry, along with the Central Bank of Russia's hostile stance toward cryptocurrency.
The fund's launch is subject to regulatory approval in Russia, although industry experts predict approval is likely and that the central bank may soften its attitude toward crypto mining. While Russia's central bank previously prohibited digital assets' inclusion in mutual funds, a few mutual funds that invest in blockchain technology companies have been approved. Vladislav Kochetkov, Finam Group's head, plans to submit the mutual fund rules for approval to a specialized depository after March 1.
Crypto mining gains ground in Russia
BitRiver, a company that offers hosting services for mining equipment, has observed a surge in interest from leading banks, investment firms, and the United Kingdom, according to reports. Artem Mayorov, director of the U.K. asset management department, revealed that mining profitability could soar up to 50% annually, subject to electricity costs, at current bitcoin equipment prices and exchange rates. However, market analysts caution that purchasing mining equipment entails certain risks, as equipment can quickly become outdated and less efficient compared to newer supercomputers, thereby impacting the return on investment.