Crypto Mining Farms Suspend Operation in China’s Guizhou and Xinjiang for Tax Inspection. Will Bitmain be Affected?
Some cryptocurrency mining farms in China’s coal-abundant areas have recently been required to halt operation for tax inspection and the completion of real-name registration, and these mining warehouses’ power was shut off , local news outlet Cong News reported on November 11.
An anonymous miner said relevant government agencies ordered some mining farms in southwest China’s Guizhou Province and the far-western region of Xinjiang to suspend operation starting from November 5.
The report stated that the enforcement team examined his mining farm’s tax returns, cash flows and customs’ information. And the tax inspection was extremely strict. Further, the mining farm was required to sign a pledge, promising that its mining data center will not provide services to the customers who have not completed the real-name registration to meet compliance criteria.
“According to the new regulations from Public Security Organs, our company will implement a more strict real-name registration in the near future to ensure the national network and information security,” the statement published by the mining farm mentioned.
The allegedly afflicted mining farm seems to be a ‘authorized’ mining enterprise. It has completed the formalities of industrial and commercial registration, tax registration, social security and other insurances in accordance with national laws and regulations. But it suffered a power outage without notice on November 5, and the power supply has not been restored as of press time.
The mining company has to endure an estimated loss of 1 million yuan every day during the period of ‘rectification’. The miner claimed the electricity had only been shut off to small numbers of mining farms in the region, and Xinjiang Production and Construction Corps (XPCC), a provincial-level organ set up by the central government to develop the economy of Xinjiang, has already required local mining farms to relocate its operation and informed them of the potential brownouts . He believed the renewed regulation may affect a number of miners in the future.
The report has not been confirmed by local authorities. But it comes at a time when Bitmain, the world’s largest bitcoin mining firm and an avid participant in the upcoming Bitcoin Cash hard fork, are deploying 90,000 mining rigs in Xinjiang. It remains to be seen whether this regulatory initiative will have an impact on Bitmain and the looming BCH hard fork.
This is not the first time for regulators in Xinjiang Uyghur autonomous region to limit crypto mining operations. In July, Xinjiang’s Economic and Information Commission (EIC) issued a notice, demanding that local utility companies report and shut down illegal bitcoin mining operations.