Crypto miners squeezed by new crackdown

Photo: EPA

Big international crypto miners suffered intensive pressure from China and that hampered the price of Bitcoin and other crypto assets, Reuters reported. The operation of Beijing was focused on Bitcoin mining and trading. A State Council committee led by Vice Premier Liu announced the crackdown as part of efforts to fend off financial risks.

It was the first time China's cabinet has targeted virtual currency mining, a sizable business in the world's second-biggest economy that some estimates say accounts for as much as 70% of the global crypto supply.

Cryptocurrency exchange Huobi on Monday suspended both crypto-mining and some trading services to new clients from mainland China, adding it will instead focus on overseas businesses. BTC.TOP, a crypto mining pool, also announced the suspension of its China business citing regulatory risks, while crypto miner HashCow said it would halt buying new bitcoin mining rigs. Crypto miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify virtual coin transactions in a process which produces newly minted crypto currencies such as bitcoin.

Crypto mining consumes a lot of energy, which runs counter to China's carbon neutrality goals. The crackdown is also part of China's stepped-up drive to curb speculative crypto trading. Bitcoin took a beating after the latest Chinese move and fell nearly 50% from it's all-time high. It shed as much as 17%, before paring some losses and was last trading steady in Asia.

The annual energy consumption of China's cryptocurrency miners is expected to peak in 2024 at about 297 terawatt-hours, greater than all the power consumption by Italy in 2016, according to a study recently published in scientific journal Nature Communications.

Similar articles

  • Bundesbank President Weidmann wants a limited role initially for digital euro

    Bundesbank President Weidmann wants a limited role initially for digital euro

    A digital euro, currently under design by the European Central Bank, should have a limited role initially as it could disrupt the bank sector and overly extend the role of central banking, Bundesbank President Jens Weidmann said on Tuesday, cited by Reuters. "A gradual approach might make sense given the risks involved – that means a digital euro with a specific set of features and the option to add further functionalities later," Weidmann, who is member of the European Central Bank (ECB) Governing Council, told a conference.

    52
  • European banks book €20bn in tax heavens

    European banks book €20bn in tax heavens

    The European banks are very far from halting operations with tax heavens to book their profits. This practice was little changed since 2014 even after country by country disclosures are becoming mandatory, the EU Tax Observatory noted in an official report.

    61
  • PayPall allows crypto deals for UK clients

    PayPall allows crypto deals for UK clients

    The payments platform PayPal announced it would allow its clients based in UK to buy and sell cryptocurrencies. Until now PayPal only allowed its US customers to trade in crypto asstets. The company sees its UK expansion in digital money trading as a milestone in its cryptocurrency services, Reuters reported.

    75