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Inner Mongolia authorities recently confiscated more than 10,000 cryptocurrency mining equipment, which is in line with the government's commitment to crack down on the crypto mining sector.
According to a report from local media on Monday (September 27, 2021) the Inner Mongolia branch of the National Development and Reform Commission (NDRC) found 10,100 cryptocurrency mining equipment in the warehouse of a government park. The authorities were able to clamp down on the illegal mining operation after receiving reports from people.
The seizure of the mining machines follows a recent statement by the NDRC, calling on provinces, municipalities, and autonomous regions to strengthen monitoring of abnormal power usageby illegal mining operations. The statement also said that local authorities were not allowed to support crypto mining projects in any way
Meanwhile, back in May, the Vice Premier of the People’s Republic of China,Liu He, during a meeting, stated that it was necessary to crack down on bitcoin mining
Few days after He's statement, Inner Mongolia proposed to monitor and punish companies and individuals involved in mining activities. Internet firms, telecom companies, data centers, cybercafes, providing resources to bitcoin miners, could risk closure, have their business licenses revoked and be banned from the region's power trading scheme.
Inner Mongolia's crackdown on crypto mining aims to reduce environmental risks caused by such activity. According to the region, the 10,100 miners consumed 1,104 kWh of electricity.
Meanwhile, the government is looking to remove all crypto mining-related projects and ban investments in new ones. So far, Inner Mongolia says it has closed down 45 crypto mining projects, thereby saving the region 6.58 billion kWh of electricity a year, which is equal to two million tons of coal.
China's hostility towards the mining sector is nothing new. The country's crackdown on the industry caused many businesses to shut down operations and relocate to friendlier jurisdictions like Kazakhstan.
Mining facilities in provinces such as Xinjiang, Sichuan, Qinghai, Yunnan, Inner Mongolia, issued notices to bitcoin miners to close down mining farms. This action caused a decline in China's share of total bitcoin mining power.
However, a July report by the Cambridge Centre for Alternative Finance (CCAF),stated that China was already facing a decline in its global power mining share before the government's crypto mining crackdown down in June. According to data, the country's share fell from over 75% in September 2019 to 46% in April 2021.
Apart from cryptocurrency mining, the FUD (fear, uncertainty, and doubt) coming out of China continues to intensify. Recently, the country's central bank, People's Bank of China (PBOC), declared that cryptocurrency activities were illegal, reiterating similar statements made in the past.
The PBOC also said that banks and financial institutions were banned from facilitating crypto-related services while adding that offshore crypto exchanges were not allowed to service customers in Mainland China. Furthermore, token issuance and crypto derivatives, trading, and order matching were prohibited in the country.
In response to China's renewed crypto crackdown, major cryptocurrency exchange Huobi announced that the company will not allow the registration of new users from mainland China on its platform. The exchange also revealed plans to "gradually retire" users in the same region by the end of 2021.