The Financial Commission takes a stand against bitcoin mining and trading A new wave of mining farms out of the sea may be coming

May 22nd was supposed to be the cryptocurrency community’s annual Bitcoin Pizza Day. But the day before this year’s Bitcoin Pizza Day, the cryptocurrency community received bad news.

The Financial Commission takes a stand against bitcoin mining and trading A new wave of mining farms out of the sea may be coming

May 22nd, was supposed to be the cryptocurrency community’s annual Bitcoin Pizza Day. The festival, which celebrated the first physical transaction of Bitcoin in 2010 when Florida programmer Laszlo Hanyecz successfully bought 2 pizzas with 10,000 BTC, has always been a carnival where people in the cryptocurrency community eat pizza together to celebrate. But the day before this year’s Bitcoin Pizza Festival, the cryptocurrency community was greeted with bad news.

On May 21, the Financial Stability Development Committee of the State Council (hereinafter referred to as the Finance Committee) held its fifty-first meeting to study and deploy the next phase of key work in the financial sector. The meeting pointed out to strengthen the supervision of financial activities of platform companies, crack down on bitcoin mining and trading practices, and resolutely prevent the transmission of individual risks to the social sector.

For this news, the reporter asked a number of mining industry veterans, all said that it was very sudden, still waiting and watching.

Although this year, some local governments have repeatedly tightened the regulation of bitcoin mining, such as May 18, Inner Mongolia Development and Reform Commission issued a “Notice on the establishment of virtual currency “mining” enterprise reporting platform”, for four types of virtual currency “mining” enterprises, the establishment of The report platform, fully accepting the letter and report, is intended to resolutely clear out virtual currency mining. But in the opinion of most bitcoin mining circle practitioners, this is only a regional policy, Inner Mongolia is the majority of the head of the mining field in the early years of the transfer of the region, the overall view, the domestic comprehensive ban on bitcoin mining industry is less likely.

A senior member of the cryptocurrency community told the 21st Century Business Herald that, interpreting the expressions put forward at the Financial Committee meeting, corporatized bitcoin mining farms are likely to be banned, but they should not be directly called off, and the specific operation should give the mining farms a certain deadline to clear out. But because bitcoin mining has actually been a relatively modest area of this industry, essentially selling equipment and running equipment, so if individuals are buying and selling equipment and running mining, it may be more difficult to regulate the clearance to that level. However, the policy direction of mining is currently relatively clear, but need to look at the future specific details of the landing documents.

The person further said that the future specific introduction of the rules and documents, or will repeat the situation in 2017-2018 after the state retired ICO virtual currency exchanges collectively to the sea, that is, the bitcoin mining industry also collectively to the sea, operating entities to move, the result is the North American mining bonus.

“The circle of friends already have engaged in mining investment people began to collect domestic second-hand mining machines intended to be shipped overseas. In fact, the last year or two because of the local policies for mining change from time to time, and not too stable, so many investors in the past year or two began to layout overseas mining, hoping to deal with policy risks.” He said.

From the 21st Century Business Herald reporter interview was informed that many head mines have stepped up the layout of overseas mines in recent years, Central Asia and North America is the main layout direction. However, affected by the epidemic, the layout speed is limited, but the introduction of policies or will accelerate its overseas layout.

From the experience of that big purge in 2017-2018, on September 4, 2017, the central bank and seven other ministries and commissions jointly issued the “Announcement on Preventing the Risk of Token Issuance and Financing”, which required the immediate cessation of all kinds of token issuance (ICO) financing activities (referred to as the September 4 policy), and also blocked a number of virtual currency trading platforms.

But after the ban, these platforms then moved overseas, continuing to exist and maintain active trading in countries and regions beyond the reach of domestic regulation, such as the Seychelles and Belize. Since then, the central bank has organized the blocking of “overseas” virtual currency trading platforms, and public information shows that as of May 2018, 110 websites have been blocked, including and The relevant departments also continued to strengthen the cleanup and rectification from the payment and settlement side, repeatedly interviewing non-bank payment institutions such as CaiPay and Alipay, asking them to strictly implement the requirement of not conducting business related to bitcoin and other virtual currencies.

But even with the various measures taken domestically, more than three years have passed since that big cleanup, and the exchanges are still surviving well by going offshore.

Thus, in the view of many in the cryptocurrency community, the subsequent regulatory documents expected to be introduced to crack down on bitcoin mining and trading will lead to another round of offshore mining.

However, some industry insiders have questioned the success or otherwise of mining farms going abroad; after all, in 2018 there were many experts and scholars who offered reflections and suggestions on the current situation of exchanges going abroad at that time. For example, Guo Tianyong, a professor at the School of Finance of the Central University of Finance and Economics, suggested that domestic regulators could not stop the overseas operations of exchanges, and if they wanted to effectively stop virtual currency trading, they should close the domestic trading channels to the outside world, and called for the technological level of China’s financial regulation should be improved. And with the improvement of China’s financial regulatory capacity, this round of regulation against bitcoin mining is just blowing the signal, but everything that follows, is still on the way.

Posted by:CoinYuppie,Reprinted with attribution to:
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