Editor’s Note: There is no doubt that domestic cryptocurrencies have entered the era of strong regulation, and relevant restrictive policies will be gradually implemented in various mining-heavy areas, so it is foreseeable that it has become a trend for companies to speed up going abroad.
On May 21, the Financial Stability Development Committee of the State Council held its 51st meeting to study and deploy the next phase of key work in the financial sector. The meeting mentioned the deployment requirements regarding the crackdown on bitcoin mining and trading practices.
This shows the regulator’s determination to rectify the chaos in the cryptocurrency world. In particular, Inner Mongolia, a major mining area, has fired the first shot against mining in China.
So how are the relevant companies responding to the high pressure on cryptocurrencies in China?
China’s mining abroad, domestic hosting has been suspended
Going abroad has become the choice of many mining and production mining companies. For the time being, there are two listed companies that have publicly stated that they are mining in Kazakhstan.
On May 24, Bit Mining (formerly 500 Lottery) announced that it had invested in mining in Kazakhstan and signed two agreements for hosting mining machines in Kazakhstan. The two parties will jointly invest in the construction of a large data center in Kazakhstan (“Kazakhstan Mine”). Under the terms, Bit Mining plans to invest a total amount of RMB 60 million (approximately $9.33 million) to build and operate a mine with a load of 100 MW with the partner. Upon completion of the mine, the company will hold an 80% stake in the Kazakhstan mine and the partner will hold a 20% stake.
The company also plans to establish a mining business in Kazakhstan with mining machine maker Jia Nan Technology. on June 1, Jia Nan Technology’s chairman and CEO Zhang Nan Gang had revealed during an earnings call that it had set up a main body in Singapore to operate a specific mining business and was making preparations for a self-operated mining business in Kazakhstan, with the first batch of mining machines sent out in late May for the self-operated mining business. on June 8, according to a press release from Jia Nan Technology, the company’s chairman and CEO, Zhang Nan Gang, said the company had set up a main body in Singapore to operate a specific mining business and was making preparations for a self-operated mining business in Kazakhstan. On June 8, the company has set up its first overseas after-sales service center in Kazakhstan, according to a press release from Kanan Technology. The center will provide local customers with after-sales services, such as mining machine testing and maintenance, warranty services and technical consulting.
Another entrant into the cryptocurrency space, Ninth City, has chosen Canada as the location for its mining operations.
On June 4, Ninth City announced that it has signed a formal share purchase agreement with Montcrypto Ltd. of Canada (“Montcrypto”) to build a 20MW carbon-neutral mine in Calgary, Alberta, Canada, to provide greener power for the company’s digital currency mining business. to provide greener power for the company’s digital currency mining business.
Under the agreement, Ninth City will invest a total of C$7.6 million in Montcrypto in two phases to acquire a controlling stake in Montcrypto; Montcrypto will use its business resources and technology to enter into natural gas procurement contracts with local oil extraction companies and build the digital currency mine, using natural gas as a source of power generation for the mine. The mine will have a power supply capacity of 20MW and can supply over 6,000 Ant S19j mining machines for operation. Under the agreement, the company pays Montcrypto a hosting fee of C$0.037/kWh for five years for the miners.
Separately, Ninth City said it has completed a transaction with SkychainTechnologies Inc. (“Skychain”), a publicly traded Canadian mining company that previously signed an investment term sheet, in which the Company invested in Skychain to expand and operate its digital currency mining facility in Burtell, Manitoba, Canada. Upon completion of the expansion, Ninth City will deploy digital currency miners at the site.
In addition, mining machine operators such as Huobi Mall and BTC.TOP have decided to suspend their mining operations in China.
On May 23, Huobi Mall officially issued an announcement saying: In order to cooperate with the latest industry regulatory policy in China, the mall decided to suspend the sale of mining machines and derivative services for users in mainland China. For users who have purchased BTC mining products, the hosting service of mining machines will be suspended, and the machines will be taken offline from today’s power outage. We would like to remind you that users who have purchased FIL servers with full storage capacity will not be affected.
Jiang Zhuoer, the founder of Lepit Mining Pool, also said on Sina Weibo that “the joint mining business will not be open to mainland China anymore” and that mining will be deployed mainly in North America behind.
Mining-related Bans, Inner Mongolia Takes First Shot
“Mining” heavy Inner Mongolia, the first shot of the domestic anti-mining.
On March 3, Inner Mongolia Autonomous Region Development and Reform Commission issued “on ensuring the completion of the “14th Five-Year” energy consumption double control target task of a number of safeguards (draft for comment)”, plans to fully clean up and shut down virtual currency mining projects, while strictly prohibited new virtual currency mining projects. Article 7 stipulates: to control the scale of data center construction in a reasonable and orderly manner, and strictly prohibit new virtual currency mining projects. Article 9 stipulates: comprehensive cleanup and shutdown of virtual currency mining projects, all out by the end of April 2021.
On May 17, the Inner Mongolia Development and Reform Commission issued an announcement on the establishment of a reporting platform for virtual currency mining enterprises, targeting four types of virtual currency mining enterprises, including virtual currency mining enterprises; virtual currency mining enterprises disguised as data centers to enjoy preferential policies on taxation, land, electricity prices, etc.; enterprises providing space rental and other services for virtual currency mining enterprises; and enterprises engaging in virtual currency mining business by obtaining electricity supply through illegal means.
In the evening of May 25, according to the official public number of the Inner Mongolia Development and Reform Commission, Inner Mongolia has drafted the “Inner Mongolia Autonomous Region Development and Reform Commission on resolutely combating and punishing virtual currency “mining” behavior eight measures (draft for public comment)” for public comment.
The regulatory document consists of eight measures, roughly in three parts to regulate virtual currency mining.
The first is to limit the flow of electricity and energy to bitcoin mining, the Inner Mongolia Autonomous Region requires industrial parks, data centers, power plants and other energy concentrations to prohibit the provision of electricity and sites to “mining” enterprises, cutting off the energy line from the source of mining enterprises.
The second part is to crack down on the phenomenon of “hanging sheep’s head to sell dog meat”, that is, by relying on the “big data center”, “cloud computing”, “communication” and other industries under the banner of the company, but the actual “mining” business to be severely punished, including the revocation of value-added telecommunications business license, withdrawal from the Inner Mongolia power multilateral trading market and other punitive measures.
The third part is to restrict enterprises and individuals from stealing electricity, Internet cafe mining, money laundering and illegal fund raising for the purpose of making profits from cryptocurrencies, and they will be held criminally liable in accordance with the relevant laws of China.
The background of this draft is that the Inner Mongolia Autonomous Region, in accordance with the 51st meeting of the Financial Stability Development Committee of the State Council, Vice Premier Liu He’s deployment requirements to combat bitcoin mining and trading, and the strict implementation of the Inner Mongolia Autonomous Region on ensuring the completion of the “14th Five-Year Plan” double control of energy consumption goals and tasks of several safeguard measures. The core goal is to maintain financial stability and to lead the green transformation by reaching the carbon peak and carbon neutrality.
In Sichuan, another “mining” region, the implementation of policies related to cryptocurrencies has become the focus of the industry.
Previously, Sichuan provincial authorities planned to implement temporary all-day power restrictions for all big data users in the hydropower consumption demonstration area from May 16 onwards, with restoration time to be notified depending on the supply and demand situation. This is a unified Sichuan power grid to the hydropower consumption park a pullout power restrictions, in the hydropower consumption park of bitcoin mining projects affected.
A mining owner said that in early April this year, the Sichuan Provincial Department of Ecology and Environment issued a notice “Sichuan Province actively and orderly promotion and regulation of carbon neutral program”, now Sichuan is for some high energy consumption, high emissions of enterprises to carry out mapping action, which is also the trigger for this large area shutdown.
Xinjiang, another “mining” hub, introduced its latest cryptocurrency-related policies on June 9. The Development and Reform Commission of Changji Prefecture, Xinjiang, issued a notice that all enterprises engaged in virtual mining must stop production and rectify by 14:00 on June 9, and report the situation to the Development and Reform Commission of Changji Prefecture.
There is no doubt that domestic cryptocurrencies have entered an era of strong regulation, and relevant restrictive policies will be implemented gradually in various mining regions. Gyro Finance will continue to pay attention to the implementation of the policy and the business progress of the enterprises after going abroad.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/crypto-companies-in-the-era-of-strong-regulation-is-going-abroad-to-make-a-living-the-only-way-out/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.