Security

China Plans To Shut Down all Illegal Mining By September

Cryptos have been controversial in China for a while now. There were earlier rumours of the Chinese government completely banning cryptocurrencies and foreign platforms, as reported by South China Morning Post. However they fortunately only turned out to be rumours as the country is now expected to legalise cryptos.

Nonetheless, another piece of news is doing the rounds these days. According to reports, country’s Xinjiang Uyghur region has plans to eliminate all illegal bitcoin mining operations by September.

Such rumours have been circulating for a while now, but they have recently been confirmed.

Rumours were created when a government notice released by Xinjiang’s Economic and Information Commission was leaked on the internet.

The notice demanded that all illegal mining operations get shut down by the end of August. The notice, first leaked on the weekend, was proven to be original when one of the officials confirmed of its authenticity on Monday.

Illegal Mining – Utility Companies to Make Reports

The definition of illegal mining here is quite clear. Anyone mining the cryptocurrency without being licensed as a business is said to be running an illegal business. In addition to this, anyone using electricity to mine bitcoin with having any contract with utility firms is also said to be doing it illegally.

The authorities have asked all utility companies to shut down such illegal operations and send an update on the situation by August end.

The letter reads, “Local utility agencies and companies will be held accountable if they failed to shut down ‘illegal’ bitcoin mining operations.”

According to CNBC, Chinese authorities have in the past caught and seized several computers used to mine bitcoin, but this time they seem to be counting more on utility companies.

It should also be mentioned here that this is not the first time the government has tried to get utility companies on board to prevent illegal bitcoin mining.

Long-term Planning Against Bitcoin Mining

The government made the move earlier in January when the authorities issued a notice that demanded all Xinjiang’s utility companies to prepare and send reports to the authorities on activities related to bitcoin mining.

This proves that the government had been planning this move for a while now and the plan seems to prepare these utility companies for a nationwide orderly exit.

While exact figures are not available, the notice had some impact on bitcoin mining operations in the country.  

The EIC in June 2017 had asked municipal governments to be cautious regarding companies that were into bitcoin mining. The EIC believes that these operations do not help the economy and only result in the wastage of electricity.

The statement read, “These operations contribute nothing to the region’s economy besides consuming a spiking volume of electricity.”

This Kills Hope For Bitcoin Miners

The issue is of major concern since a large number of bitcoin miners were looking at Xinjiang and other such regions due to cheap electricity available there.

In fact, Bitmain had earlier announced its intention to construct a datacenter in Xinjiang for the purpose of bitcoin mining, however with these new challenges that might not happen after all.

Related post:

South Korea’s crypto renascence with new exchanges regulation

Michael Wight

Michael is a freelance writer with special interest in finance and technology. He regularly trades cryptocurrencies and loves to share his knowledge with others.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close