Shanghai/Hong Kong: China’s crackdown on cryptocurrency “mining” has spread to the southwestern province of Sichuan, and the authorities have ordered the closure of cryptocurrency mining projects in major mining centers.
Crypto mining is a big business in China, accounting for more than half of global Bitcoin production. But China’s cabinet and the State Council vowed last month to ban bitcoin mining and trading as part of a series of measures to control financial risks.
Other popular mining areas, such as Inner Mongolia, have cited electricity generated from high-polluting sources such as coal for cryptocurrency mining in their orders for the industry.
The action taken in Sichuan on Friday-miners mainly use hydroelectric power to run specially designed computer equipment used to verify bitcoin transactions-shows that the attack has a broader scope.
The Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Bureau issued a joint notice dated Friday and seen by Reuters, requiring the closure of 26 suspicious cryptocurrency mining projects by Sunday.
According to data compiled by the University of Cambridge, Sichuan is the second largest Bitcoin mining area in China. Some miners move their activities there in the rainy summer to take advantage of its abundant hydropower resources.
The notice required Sichuan’s state-owned power company to conduct inspections and rectifications, and report the results by Friday. They will immediately stop supplying power to the cryptocurrency projects they detect.
The authorities urged the local government in Sichuan to start sorting out crypto mining projects and shut them down. It banned new projects.
Other regional mining centers, including Xinjiang, Inner Mongolia, and Yunnan, have ordered crackdowns on Bitcoin mining.
Friday’s notice seems to indicate that Beijing’s dissatisfaction with cryptocurrency mining is not limited to the use of coal for power generation.
“Renewable power does not help,” said Winston Ma, NYU Law School adjunct professor and author of the book “the Digital War”.
“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,” Ma told Reuters.
Some miners have been considering moving elsewhere due to the crackdown.