China ousts former official for supporting crypto mining, corruption

A former Chinese official has been expelled from the Communist Party of China for “serious violations of discipline and law” as he was found to introduce and support cryptocurrency mining activities, in what may be the first time for China’s anti-graft watchdog to expel an official over crypto mining.

Fast facts

• The country’s anti-corruption watchdog announced Saturday that Xiao Yi, a former vice chairman of the Jiangxi provincial committee of the people’s political consultative conference, has been removed from office and expelled from the party.

• Xiao was accused of abusing his power to introduce and support virtual currency mining activities that went against the national industrial policy, as well as other corrupt behavior including taking bribes and engagement in trading power for money and sex.

• The authority said Xiao could face criminal charges as the anti-graft watchdog is transferring the confiscated property to procuratorial bodies.

• The expulsion comes after the National Development and Reform Commission (NDRC), the nation’s top economic planner, on Wednesday held a special meeting to instruct local authorities to build up systems and strengthen monitoring to identify and “clear out” crypto mining projects.

• China has been actively clamping down on crypto mining since earlier this year. On Sept. 24, the NDRC jointly issued a notice with 10 other authorities to wipe out crypto mining. The NDRC has also proposed to label the crypto mining industry as “outdated,” which could prohibit investments in the sector.

• In the wake of the stepped-up ban within China, many crypto miners are moving to more regulation-friendly shores, and the U.S. has appeared to be benefiting from the exodus.

• The U.S. has overtaken China’s leading position in cryptocurrency mining, according to the latest data from the Cambridge Centre for Alternative Finance. At the end of August, the U.S. accounted for 35.4% of the global hashrate share — which refers to the level of computing power required to mine — representing a significant surge from 16.8% at the end of April.