According to people familiar with the matter, China’s crackdown on the cryptocurrency industry is now targeting miners trying to disguise themselves as data researchers and storage facilities to keep their businesses going.
People requesting anonymity because of the sensitivity of the matter said that inspections targeting illegal mining activities in universities, research institutes and data centres increased in several provinces in China this month. Concern about the country’s imminent winter power supply is one of the reasons for the urgency.
The new round of control could further throttle the number of cryptocurrency mining in China, which has been the dominant player for many years and recently accounted for 46% of the global hash rate as of April, which is a measure of the mining and mining usage indicator the Computing power is processed according to the Cambridge Bitcoin Power Consumption Index.
Miners Fled China to Other Countries
After China cracked down on the industry earlier this year, both the price of Bitcoin and the global hash rate fell, but they have since rebounded. Although many miners have fled the country, some are betting that under government supervision they can continue to thrive by switching to lesser-known tokens and decentralized storage technologies.
The People’s Bank of China and the National Development and Reform Commission did not respond to questions sent by fax.
An unnamed miner said his business has remained intact so far because he often replaces new facilities to store his equipment – no more than 100 machines in one place – making it harder for regulators to spot irregularities in power usage.
In the northern province of Hebei, which accounts for a small share of the industry, local agencies required companies and institutions to avoid cryptocurrency mining with their computing systems, and asked for a self-compliance check before September 30, according to a statement released on Wednesday.
The local Internet regulator said in a statement that large-scale crypto mining will have serious economic and social development implications and will directly threaten national security. The statement added that trading cryptocurrencies had disrupted the financial order.
It said the government will put in place a mechanism in October to regularly monitor and track computer activity. It added that the person in charge of the data system who discovered illegal mining will be punished and the relevant internet connection will be cut.
On Wednesday, the coal-rich Inner Mongolia regional government said it had hired a contractor to investigate how cryptocurrency mining could be eradicated.