NYSE-Listed Chinese Mining Company Set to Move Operations to Kazakhstan
In the face of the clampdown on cryptocurrency mining and other crypto-related activities in China, affected companies are moving out of the region. As a result of this, BIT Mining Limited, one of the leading mining companies in China that are listed on the New York Stock Exchange (NYSE) is set to relocate to Kazakhstan.
In an announcement, the company had made known to the public that it has agreed with another Kazakhstan-based company to build a data center in Kazakhstan.
The recent decision by the Chinese government and regulators to enforce the ban on cryptocurrency-related businesses is perceived as a hostile approach by the Bitcoin and cryptocurrency community. The majority of users believe that it is an attempt to destroy Bitcoin and promote the incoming Digital Yuan which the government is working hard to release soon.
BIT Mining Limited is not the first major cryptocurrency company to react to this development. Earlier, the CEO of BTC.TOP has announced that his company would be shifting operations towards North America, especially in the establishment of data centers.
The intended move by BIT Mining Limited passes as a significant event, considering the status of the company in the industry and the number of funds involved in the exercise. According to reports, the company plans to invest RMB60 million in the Kazakhstan data center. This is equivalent to about $9.35 million at the time of writing.
China’s Recent Clampdown on Cryptocurrencies
On May 21, the Financial Stability and Development Committee of the State Council (Financial Committee) held its 51st meeting. According to a report released by the committee, the essence of the meeting was to study and deploy key tasks in the financial sector in the next phase.
Of critical concern to Bitcoin and cryptocurrency, the community was the part of the report that firmly suggested an immediate clampdown on Bitcoin and cryptocurrencies. It reads;
….strengthen the supervision of platform enterprises’ financial activities, crackdown on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.
On reaching the public, this piece of information caused selling pressure in the cryptocurrency market which pushed prices significantly low. Bitcoin dropped to almost $30K before finding support. As of the time of writing, Bitcoin price is still struggling to recover, as it is finding resistance around the $40K price level.
Recent Ban Causes a Ripple Effect
The stand by the Financial Committee has triggered a ripple effect across China, with Northern China’s inner Mongolia’s region reinvigorating its resistance to cryptocurrency activities.
The region has escalated its fight in the clampdown of cryptocurrency activities with the proposal of new draft rules to punish defaulters. This is one of the reasons for the exodus of miners from the region to seek more friendly environments to practice their endeavors.
The proposed new rules from Inner Mongolia are available for public review until June 1. Contained in the proposal are consequences for anyone found to be defaulting on the rules. Such individuals or groups could be put on a social credit blacklist barring them from getting loans or making use of the country’s transportation system, as well as facing other legal consequences. Also, the citizens of the Inner Mongolia region have been called upon to report any illegal Bitcoin mines around them.
China has been the global hub of Bitcoin mines, with the lion’s share of the network’s hashrate coming out of the region. Things are changing very quickly as many operators are shifting base, with new competitors entering the field in other regions of the world.
The offshoot of the ban by China’s government is still developing, and the impact on the network is not yet complete. However, as the industry adjusts to the new structure, the Bitcoin and cryptocurrency community are also on the lookout as to the actual reasons why China is vehemently resisting the development of cryptocurrencies.