Bitcoin Plunges as China Widens Crackdown on Crypto Mining
Bitcoin tumbled more than 10% on Monday after China broadened a crackdown on its massive cryptocurrency mining industry with a ban on mines in a key southwestern province.
Chinese mines power nearly 80% of the global trade in cryptocurrencies despite a domestic trading ban since 2017, but in recent months several provinces have ordered mines to close as Beijing turns a sharp eye to the industry.
Authorities in the province of Sichuan ordered the closure of 26 mines last week, according to a notice widely circulated on Chinese social media and confirmed by a former bitcoin miner.
The price of bitcoin sank to as low as $32,309. The unit has taken a severe hit in recent weeks, having hit a record near $65,000 in April, partly because of Beijing’s crackdown.
The notice reportedly instructed power companies to stop supplying electricity to all cryptocurrency mines by Sunday.
It vowed a “complete clean-up” and ordered local governments to carry out a “dragnet-style investigation” to find and shut down suspected crypto mines.
The province represents one of the largest bases for mining in the country.
A former cryptocurrency miner told AFP they had “closed everything” in line with the requirements in recent days.
“There have been working groups coming to check… making sure we shut down operations and removed the machines,” he said.
Sichuan, a mountainous region in southwest China, is home to a large number of cryptocurrency mines, which require a colossal amount of energy supplied by the province’s cheap and abundant hydropower.
According to a report in the state tabloid the Global Times, the closure of mines in the province has resulted in the shutting down of more than 90 percent of the country’s bitcoin mining capacity. AFP