China Investigates Illegal Bitcoin Mining Farms

by Senad Karaahmetovic

After announcing its plan to eliminate bitcoin mining activities, China has continued a crackdown on cryptocurrency-related activities after it appeared that government authorities probed into local bitcoin mining sites in the Sichuan province, southwest China, Coindesk reports.

Accordingly, the land-resource local office in the mountainous Garze county inspected locations believed to be bitcoin mining farms built at the sites of hydropower stations without a license or state-issued approval. According to Garze county regulation, no bitcoin mining projects are allowed.

“We are still investigating on the issue and can’t disclose more details on the overall situation,” said an official from the Economic and Information Bureau to a local state-owned newspaper.

Unofficially, the local authorities found illegal bitcoin mining farms built at hydropower stations to benefit from cheap electricity. According to the local newspaper, one of the located facilities has the capacity to host 50,000 units of bitcoin mining equipment.

“If [a bitcoin mining farm] is built within the authorized area of a power station for electricity consumption, we need to verify if their usage is legal. If it’s outside the authorized area, then it needs to be dealt with as the construction was not approved,” an official from the local land resource bureau said.

It is estimated that 80% of Chinese miners, equivalent to 48% of global miners, is located in Sichuan province, which is rated as almost ideal for the bitcoin mining activities as it offers high-speed internet, low electricity costs and, in the case of the northern part of the province – lower temperatures.

Last month, Newconomy reported that Chinese Government plans to ban bitcoin mining. The National Development and Reform Commission (NDRC) included bitcoin mining in the list of 450 activities it plans to encourage, restrict or eliminate. Bitcoin mining was classified under the “eliminate” category with a comment that “the industry contributes to pollution and wastes resources”.

In similar news from a few days ago, China sentenced a 61-year-old woman to four months in jail and a $1,500 fine for stealing electricity while mining bitcoin. The court found that she stole the equivalent of $1,300 electricity in 2018.

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