{"id":3125,"date":"2023-09-11T00:00:00","date_gmt":"2023-09-11T00:00:00","guid":{"rendered":"http:\/\/www-prod.greenpeace.org\/usa\/campaign-updates\/3125\/citigroup-funds-bitcoin-pollution\/"},"modified":"2024-11-22T06:15:17","modified_gmt":"2024-11-22T06:15:17","slug":"citigroup-funds-bitcoin-pollution","status":"publish","type":"post","link":"https:\/\/www.greenpeace.org\/usa\/citigroup-funds-bitcoin-pollution\/","title":{"rendered":"Citigroup Funds Bitcoin Pollution"},"content":{"rendered":"<p><span class='p4descriptive_paragraph'>Citi has been expanding its presence in the cryptocurrency sector by developing services that enable buying and selling Bitcoin, and providing underwriting for Bitcoin mining and other crypto companies to raise capital. These dirty investments contradict Citi\u2019s net zero pledges and commitments to sustainability.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Citigroup, one of the <\/span><a href=\"https:\/\/www.bankingonclimatechaos.org\/\"><span style=\"font-weight: 400;\">largest funders of fossil fuels<\/span><\/a><span style=\"font-weight: 400;\"> in the world, is investing in yet another fossil fuel lifeline &#8211; Bitcoin.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Citi has been <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2021\/05\/07\/citi-considering-crypto-services-amid-surge-in-interest-report\/\"><span style=\"font-weight: 400;\">expanding its presence in the cryptocurrency<\/span><\/a><span style=\"font-weight: 400;\"> sector by developing services that enable buying and selling Bitcoin, and providing underwriting for Bitcoin mining and other crypto companies to raise capital. These dirty investments contradict Citi\u2019s net zero pledges and commitments to sustainability.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Yet, Citi has not publicly acknowledged Bitcoin\u2019s climate impact or addressed how its investments and products are tied to Bitcoin\u2019s emissions. The operation of large traditional financial companies like Citi in the crypto sector brings a new level of trust and accessibility to Bitcoin, in addition to providing much-needed capital. Together, this support can <\/span><a href=\"https:\/\/www.sciencedirect.com\/science\/article\/abs\/pii\/S0313592623001893\"><span style=\"font-weight: 400;\">drive up the price of Bitcoin and, in turn, its energy use and GHG emissions<\/span><\/a><span style=\"font-weight: 400;\">. Most of that energy is <\/span><a href=\"https:\/\/ccaf.io\/cbnsi\/cbeci\/ghg\"><span style=\"font-weight: 400;\">generated by dirty fossil fuels<\/span><\/a><span style=\"font-weight: 400;\"> which drives the climate crisis and creates local air pollution that harms public health.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One way Citi is connected to Bitcoin is through investment and trading services. In 2021, Citi announced that it would <\/span><a href=\"https:\/\/www.reuters.com\/business\/finance\/citi-considering-bitcoin-futures-trading-some-institutional-clients-2021-08-24\/\"><span style=\"font-weight: 400;\">offer bitcoin futures trading<\/span><\/a><span style=\"font-weight: 400;\"> for some institutional clients. Citi\u2019s Securities Services team is also <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2022\/06\/22\/citibank-chooses-swiss-firm-metaco-for-digital-asset-custody\/?utm_source=Sailthru&amp;utm_medium=email&amp;utm_campaign=NODE%20JAN%2031%202023&amp;utm_term=The%20Node\"><span style=\"font-weight: 400;\">partnering with Swiss crypto firm Metaco to build Citi\u2019s digital asset custody<\/span><\/a><span style=\"font-weight: 400;\"> capabilities\u2013basically, secure accounts to store digital assets which could eventually include bitcoin. Citi\u2019s Global Wealth Investments arm also formed a <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2021\/06\/24\/citi-launches-digital-assets-group-within-wealth-management-division\/\"><span style=\"font-weight: 400;\">Digital Assets Group to expand into crypto<\/span><\/a><span style=\"font-weight: 400;\">. News outlets reported that <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2021\/11\/22\/citi-plans-to-hire-100-staffers-for-beefed-up-crypto-division\/\"><span style=\"font-weight: 400;\">Citi hired 100 people to work in a blockchain and digital assets division<\/span><\/a><span style=\"font-weight: 400;\">. Yet, there are no signs of that expertise being put to work cleaning-up Bitcoin and creating innovative solutions to move Bitcoin\u2019s consensus mechanism away from the current polluting Proof-of-Work system.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Citi has also helped Bitcoin and crypto industry companies access capital necessary for expanding their operations. The bank provides vital underwriting services for several major crypto industry companies, which helps these firms issue shares and bonds to raise money. Access to capital markets through reputable investment banks like Citi is vital for the expansion of the Bitcoin industry.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One example of this dynamic was Citi\u2019s role as joint manager for a 2021 <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2021\/11\/09\/bitcoin-miner-iris-energy-says-ipo-to-be-priced-at-25-27-per-share\/\"><span style=\"font-weight: 400;\">initial public offering (IPO) by Bitcoin miner Iris Energy<\/span><\/a><span style=\"font-weight: 400;\">. That IPO raised $231.54 million, which the company said would help develop its facilities and buy more mining equipment. Citi controlled 22.5% of the shares and earned $3.65 million in fees.<\/span><span style=\"font-weight: 400;\"> (1)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Citi was also the lead manager for Canaan Inc.\u2019s initial public offering (IPO) in 2019. Canaan is a China-based producer of ASICS, the specialized computers used for Bitcoin mining, that is also<\/span><a href=\"https:\/\/www.investing.com\/news\/cryptocurrency-news\/canaan-provides-updates-on-its-bitcoin-mining-operations-432SI-3157366\"><span style=\"font-weight: 400;\"> expanding into the operation of mining facilities<\/span><\/a><span style=\"font-weight: 400;\"> including in Kazakhstan where coal energy use is widespread and Bitcoin mining has met backlash and government restrictions. Citi controlled 54.35% of the shares offered and earned an estimated $3.91 million in fees on the IPO that raised $90 million.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In 2021, Citi was also the sole manager of a <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2021\/11\/29\/galaxy-digital-to-sell-500m-of-notes-in-private-placement\/\"><span style=\"font-weight: 400;\">$500 million bond private placement for Galaxy Digital Holdings<\/span><\/a><span style=\"font-weight: 400;\">, a crypto investment and finance company that provides financial services for Bitcoin miners and is expanding its own mining operations. (2)<\/span><span style=\"font-weight: 400;\"> Galaxy Digital said it intended to <\/span><a href=\"https:\/\/www.galaxy.com\/newsroom\/galaxy-digital-announces-closing-of-usd500-million-exchangeable-senior-notes\/\"><span style=\"font-weight: 400;\">use the capital to fund growth initiatives<\/span><\/a><span style=\"font-weight: 400;\">. Later in 2022, Galaxy <\/span><a href=\"https:\/\/www.coindesk.com\/business\/2022\/12\/28\/bitcoin-miner-argo-will-avoid-bankruptcy-with-100m-bailout-from-novogratzs-galaxy\/\"><span style=\"font-weight: 400;\">helped Bitcoin miner Argo avoid bankruptcy by issuing them a $35 million loan <\/span><\/a><span style=\"font-weight: 400;\">and buying their mining facility in Helios, TX.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Citi has also invested in the largest U.S. crypto exchange, Coinbase, that enables retail and institutional investors to buy, sell, and trade Bitcoin. The services provided by exchanges like Coinbase help drive adoption of Bitcoin and its price which ultimately leads to more energy use. In 2021, Citi was a joint lead manager for the private placement of<\/span><a href=\"https:\/\/blockworks.co\/news\/coinbases-recent-2b-bond-offering-shows-voracious-appetite-of-investors\"><span style=\"font-weight: 400;\"> two different $1 billion bonds for Coinbase<\/span><\/a><span style=\"font-weight: 400;\">, a large raise of capital for the nascent crypto industry. Citi also owns nearly $800,000 in a Coinbase bond. (3)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While Citi does not have an extensive assessment management division, the company still <\/span><a href=\"https:\/\/www.greenpeace.org\/usa\/reports\/investing-in-bitcoins-climate-pollution\/\"><span style=\"font-weight: 400;\">holds shares in 10 Bitcoin mining companies worth about $125,000 <\/span><\/a><span style=\"font-weight: 400;\">including Marathon Digital and Riot Platforms.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite expanding services for the crypto industry, Citi appears to know Bitcoin is bad for the climate. In 2021, Citi analysts published a report documenting Bitcoin\u2019s growing energy use and warned that the carbon emissions would likely meet public and regulatory scrutiny. The report highlighted how <\/span><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-04-13\/bitcoin-power-consumption-jumped-66-fold-since-2015-citi-says\"><span style=\"font-weight: 400;\">Bitcoin\u2019s energy consumption would accelerate alongside its price<\/span><\/a><span style=\"font-weight: 400;\">. Yet, Citi\u2019s <\/span><a href=\"https:\/\/www.citigroup.com\/rcs\/citigpa\/storage\/public\/taskforce-on-climate-related-financial-disclosures-report-2022.pdf\"><span style=\"font-weight: 400;\">plans to reach net zero <\/span><\/a><span style=\"font-weight: 400;\">in company financing activities by 2050 and in operations by 2030 as well as reporting on investments in carbon-intensive sectors don\u2019t address Bitcoin related investments and services. Citi is also a founding member of the UN\u2019s Net Zero Banking Alliance and joined the RMI Center for Climate Aligned Finance and the Partnership for Carbon Accounting Financials (PCAF).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Citi needs to live up to their climate commitments and be a leader in cleaning up Bitcoin and helping create innovative solutions that chart a sustainable path forward for cryptocurrencies.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Endnotes<\/strong><\/p>\n<p>1 <span style=\"font-weight: 400;\">Data on underwriting and shareholding was collected from the Bloomberg Terminal, Bloomberg Finance L.P.<\/span><\/p>\n<p>2 <span style=\"font-weight: 400;\">Data from league tables on the Bloomberg Terminal, Bloomberg Finance L.P.\u00a0<\/span><\/p>\n<p>3 <span style=\"font-weight: 400;\">Based on data from Bloomberg Terminal, Bloomberg Finance L.P.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Citigroup, one of the largest funders of fossil fuels in the world, is investing in yet another fossil fuel lifeline &#8211; Bitcoin.\u00a0 Citi has been expanding its presence in the&hellip;<\/p>\n","protected":false},"author":65,"featured_media":11167,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"ep_exclude_from_search":false,"p4_og_title":"","p4_og_description":"","p4_og_image":"","p4_og_image_id":"","p4_seo_canonical_url":"","p4_campaign_name":"","p4_local_project":"","p4_basket_name":"","p4_department":"","footnotes":""},"categories":[209],"tags":[50,63],"p4-page-type":[31],"class_list":["post-3125","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-campaign","tag-bitcoin","tag-citigroup","p4-page-type-campaign-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.9 (Yoast SEO v23.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Citigroup Funds Bitcoin Pollution - Greenpeace<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.greenpeace.org\/usa\/citigroup-funds-bitcoin-pollution\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Citigroup Funds Bitcoin Pollution\" \/>\n<meta property=\"og:description\" content=\"Citigroup, one of the largest funders of fossil fuels in the world, is investing in yet another fossil fuel lifeline &#8211; 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(Chase) and BlackRock. The display painted the skyline with images of Blackrock CEO Larry Fink and Chase CEO Jamie Dimon donning red laser eyes, similar to the profiles of Bitcoin maximalists. Bitcoin consumes as much electricity as entire countries, and 62% of the electricity used for Bitcoin mining globally in 2022 came from fossil fuels. 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