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China warns state-owned enterprises to shun crypto mining, considering punitive steps

China warns state-owned enterprises to shun crypto mining, considering punitive steps

Last updated 19th Jan 2022

China threatens to increase power prices in the country if state-owned businesses won’t stop cryptocurrency mining.

Speaking at a press conference on Tuesday, Meng Wei, a spokeswoman at the National Development and Reform Commission, said the commission is set to impose a ban on industrial-scale Bitcoin mining in China. And any involvement in crypto mining by state companies will be met with harsh repercussions.

In a special meeting held last week, the chief economic planner covered the issue and gave provinces and municipalities the onus to investigate, clean up, and bring to book state-owned enterprises involved in cryptocurrency mining activities.

Intensified campaigns against crypto miners

Beijing has intensely cracked the whip on all crypto activities this year, and for a good reason. It blames cryptocurrency miners for the deadly coal mining accidents and huge energy wastes, frustrating the country’s plans to meet carbon-neutral goals.

The country is concerned about its power supply for the upcoming winter season, which is one of the reasons for the intensified campaigns against crypto miners.

In September, officials went hunting for individuals — and state-owned companies — masquerading as data researchers and storage facilities.

Since then, coal prices have plummeted — making it less clear how the impact of increasing the cost of electricity will affect a majority in the country.

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China’s top anti-graft watchdog expels provincial official

The Central Commission for Discipline Inspection (CCDI) over the weekend expelled a former vice-chairman over alleged corruption linked to cryptocurrency mining.

Xiao Yi, 59, a senior official from the Communist Party, was stripped of his public office and will probably face a criminal trial for his alleged violations.

According to CCDI, Yi abused power for personal gain. “Investigations revealed that [he] abused his power to introduce and support companies to engage in virtual currency “mining” activities that don’t conform to the national industrial policy”.

The accused is also charged with interfering in judicial activities, trading power and money for sex, taking bribes, abuse of power for personal gain, and moral decay.

China was the world’s biggest bitcoin mining center in the first half of the year before the United States took over the position. Beijing is now looking to crack down on all cryptocurrency trading and mining activities.

As well as imposing a stricter ban on state-owned enterprises’ involvement in crypto mining. If that won’t happen, China is considering enforcing punitive measures in the form of higher power prices on companies defying the ban.

Walter Akolo

Walter Akolo

Walter is a writer from Nairobi, Kenya. He covers the latest news on the cryptocurrency market and blockchain industry. Walter has a decade of experience as a writer.