Cryptocurrency miners cannot operate in Zhejiang Province and the Shangcheng district of Hangzhou. Shandong, the second-largest Chinese province in terms of population, established the latest hotline to report illegal mining operations anonymously.
The authorities in Zhejiang Province, Hainan Province, and Inner Mongolia raised electricity rates for cryptocurrency miners. Due to the ban on cryptocurrency mining imposed last year, the measure has confused domestic and international observers.
However, that event could have resulted from a bureaucratic backlog before the crackdown on cryptocurrency mining, not from a change in government policy.
Since September 2021, the position of Beijing on cryptocurrency-related activities in China has been clear. On many occasions, they have described crypto assets as a public threat and all transactions with them as illegal. Besides, they have stated that the mining industry harms the environment with its carbon emissions.
Higher Electricity Rates Mean Crypto Mining Is Legal in Those Provinces
A representative from the local government service center of Zhejiang Province and the Shangcheng district of Hangzhou confirmed they had not yet allowed crypto mining. He explained that the new measure was a form of supporting punishment, adding to the ban.
The announcement of higher rates for cryptocurrency mining implies that the activity is legal. Discovering miners may have allowed the authorities to calculate the energy needed to power their farms and charge them accordingly.
Chinese provinces might want to save face from bureaucracy-related mistakes or punish crypto miners with higher fines. Of course, China will not reopen its doors to cryptocurrency miners in the short term.
The Authorities Ask Citizens to Report Illicit Cryptocurrency Mining Activities
Several Chinese provinces and cities have opened crypto mining hotlines to report mining incidents anonymously. A local media outlet stated that Shandong, the second-largest Chinese province in terms of population, established the latest hotline.
The authorities have asked citizens in around 16 cities in the province to report on companies and individuals that may be conducting illicit mining operations.
Meanwhile, customs officials in the Huangpu district of Shanghai seized a batch of second-hand crypto mining rigs. They claim that some people were in the process of smuggling them out of the Asian country under assumed names. Officials from Huangzhou described the machines as shabby and rusty Antminer models.
The Fight to Eliminate Cryptocurrency Mining in China Is Not Over
Although it has been increasingly harder to trade cryptocurrencies in China, many Bitcoin (BTC) enthusiasts remain active using VPNs and stablecoins like Tether (USDT). It also seems that there are still over-the-counter (OTC) businesses in the Asian country.
The authorities say they have eliminated cryptocurrency mining, but the fight to control it is far from over. Guotai Junan Securities, one of the biggest securities firms in China, recently warned its employees about the penalties for doing any form of that activity.
In 2021, state organs pointed out they had traced 21% of illegal cryptocurrency mining back to publicly owned companies and offices. An internal notice from the above securities firm required its employees to keep their office computers safe from alleged crypto mining viruses.
By Alexander Salazar
