Chinese Region Halts Cryptocurrency Mining Operations
In-line with a strict government crackdown on all things crypto, a small province in China is forced to shut-down illegal bitcoin mining operations in the region before August 2018.
As reported recently on local news Jinse, the northwestern Chinese region of Xinjiang Uyghur has identified “illegal” mining operations taking advantage of the naturally cool, mountainous region.
Xinjiang’s favorable climate and modest electricity rates have reportedly attracted mining ventures to the region’s otherwise agriculture-intensive industry. While the Chinese government is pushing major cities like Beijing and Shanghai to boost Xinjiang’s economy, small-scale miners are evidently unwelcome.
As per reports, a leaked government notice issued by Xinjiang’s Economic and Information Commission (EIC) was made available online on July 21, 2018, on a local forum. The authority criticized significant electricity usage by mining companies and demanded local utility suppliers forcefully shut down such companies.
The notice defines “illegal bitcoin miners” as any entity not formally registered with the government operation and consuming electricity without the necessary usage permits.
Utility Firms Tasked
The EIC tasked local utility firms with cracking down on illegal mining operations, upon their discretion after relevant due diligence to uncover unlicenced firms. The utility departments have been given a rather short period to conduct this undertaking – all reports must be submitted to the EIC before August 2018.
In case local authorities fail to shut down businesses, the EIC will hold them liable for incompetence.
The action followed a January 2018 effort when Xinjiang authorities called for regular reports on bitcoin mining activities in all sub-regions.
At the time, authorities aimed at creating a framework to phase out such businesses diplomatically.
In June 2017, the EIC called out mining operations as well, stating:
“These operations contribute nothing to the region’s economy besides consuming a spiking volume of electricity.”
Miners May Face Heat but Bitmain Surges Past
Mining operations will likely be compromised by this development. Although no exact number for mining ventures in the region exists, Bitmain notably announced in November 2016 its enterprising plans to shift to Xinjiang, primarily for its vast land resources, abundant electricity, and moderate weather.
Meanwhile, Bitmain is seeking a $1 billion fundraising round, as per reports on Toutiao. The mining giant recently raised a Series B funding of $300-400 million from investors like Sequoia Capital.
If reports prove to be correct and Bitmain raises the sought funds, the company will be valued at a massive $15 billion before its intended IPO launch prior to the end of 2018.
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