Crypto Mining in China faces crackdown

Cryptocurrency mining operators, including a Huobi Mall and BTC.TOP have suspended their operations in China after Beijing started to increase its crackdown on bitcoin mining and trading. 

 

A State Council committee led by Vice Premier Liu He announced the crackdown  the first time the council has targeted virtual currency mining, a big business in China that accounts for as much as 70% of the world’s crypto supply.

 

Investor protection and prevention of money laundering are particular concerns of governments and financial regulators who are grappling with whether and how they should regulate the cryptocurrency industry. U.S. Federal Reserve Chairman Jerome Powell turned up the heat on cryptocurrencies last week. On Thursday, Powell said they pose risks to financial stability, and indicating that greater regulation of the increasingly popular electronic currency may be warranted.

 

Huobi Mall, part of cryptocurrency exchange Huobi, said in a statement late on Sunday that all of its custody businesses have been suspended.

 

“Meanwhile, we’re contacting overseas service providers, to pave way for exports of mining rigs in the future,” Huobi Mall said via its official Telegram community, and asked clients “not to worry and calm down.”

  

BTC.TOP, a crypto mining pool, also announced the suspension of its China business citing regulatory risks. Founder Jiang Zhuoer said in a micro blog post via Weibo that in the future, BTC.TOP will mainly conduct crypto mining business in North America. “In the long term, nearly all of Chinese crypto mining rigs will be sold overseas, as Chinese regulators crack down on mining at home,” he wrote.

  

“Eventually, China will lose crypto computing power to foreign markets as well,” Jiang said, predicting the rise of U.S. and European mining pools.

 

HashCow, another crypto miner which owns 10 mining sites in Chinese provinces including Xinjiang and Sichuan, and sells computing power to investors, said it will fully comply with government regulations. In a statement to clients, HashCow said it will suspend buying new bitcoin rigs, and promised full refund to those investors who had placed orders for computing powers but had not yet started mining.