Beijing clamps down further on crypto mining

SHANGHAI • China's crackdown on cryptocurrency mining has extended to the south-western province of Sichuan, where the authorities have ordered such projects to be closed.

Crypto mining is big business in China, accounting for more than half of global Bitcoin production. But the State Council, China's Cabinet, last month vowed to clamp down on Bitcoin mining and trading as part of a series of measures to control financial risks.

Other popular mining regions, such as Inner Mongolia, have cited cryptocurrency mining's use of electricity generated from highly polluting sources such as coal in orders targeting the industry.

Friday's move in Sichuan - where miners harness mostly hydropower to run specially designed computers used to verify Bitcoin transactions - suggests the crackdown is more broadly based.

The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice dated Friday, demanding the closure of 26 suspected mining projects by today.

Sichuan is China's second-biggest Bitcoin mining province, according to data compiled by the University of Cambridge. Some miners move operations there during rainy summers to take advantage of rich hydropower resources.

The notice ordered state electricity companies in Sichuan to conduct inspections, make corrections and report their results by Friday. They are to immediately stop supplying electricity to crypto mining projects they have detected.

The authorities urged local governments in Sichuan to start combing for crypto mining projects and shut them down.

Other regional mining centres, including Xinjiang, Inner Mongolia and Yunnan, have also ordered crackdowns on Bitcoin mining.

Friday's notice appears to indicate that Beijing's displeasure with cryptocurrency mining extends beyond cases where it uses electricity generated by burning coal.

"Renewable power does not help," said adjunct professor Winston Ma of NYU School of Law.

"The four largest mining regions - Inner Mongolia, Xinjiang, Yunnan and Sichuan - have implemented similar crackdown measures, even though mining in the latter two are mostly based on hydropower, whereas the first two are on coal," he said.

REUTERS

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A version of this article appeared in the print edition of The Sunday Times on June 20, 2021, with the headline Beijing clamps down further on crypto mining. Subscribe