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China’s crackdown on cryptocurrency mining intensifies and spreads to Sichuan

By on June 19, 2021 0

Maintaining a firm stance on cryptocurrencies, China has issued an order to crack down on crypto mining operations in southwest Sichuan province, Reuters reported.

What happened: On Friday, the Sichuan branch of the National Development and Reform Commission (NDRC) and the Sichuan Energy Bureau ordered the closure of cryptocurrency mining projects in the main mining center.

The Commission demanded the closure of 26 suspected cryptocurrency mining projects by Sunday in the province.

Authorities ordered Sichuan state power companies to inspect and make corrections. In addition, they were told to immediately stop providing electricity to crypto-mining projects, which they detected.

They urged local governments in Sichuan to start researching and shutting down crypto mining projects.

In Sichuan, miners use hydropower to operate computer equipment to verify Bitcoin (CRYPTO: BTC).

According to data provided by the University of Cambridge, Sichuan is the second largest Bitcoin mining province in China. Here, miners move their activities during the rainy summer to take advantage of its rich hydroelectric resources.

Mitchell Cuevas, head of growth at the Stacks Foundation, says “proof of work” is the mining mechanism used by Bitcoin that requires solving complex mathematical puzzles, requiring power-hungry computing resources.

Why is this important: Sichuan’s crackdown indicates that China’s dissatisfaction with cryptocurrency mining extends beyond cases.

Other mining centers, including Xinjiang, Inner Mongolia and Yunnan, have ordered crackdowns on bitcoin mining.

In May, Chinese Vice Premier Liu He called for a “severe” crackdown, reiterating the government’s stance on cryptocurrencies.

China’s Inner Mongolia region has proposed sanctions for companies and individuals involved in crypto mining.

According to Reuters, Chinese energy regulators are meeting with local power companies to collect information on mining farms.

China is the world’s largest cryptocurrency mining site, accounting for 75% of the Bitcoin hash rate.

In 2017, it closed all local crypto exchanges and initial coin offerings (ICOs).

Price action: As of going to press, BTC traded 0.22% higher at $ 35,900 on Saturday.

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