The strictest ban in history: these 29 listed companies involved in virtual currency mining What is the risk?

There are 13 A-share listed companies, 7 Hong Kong listed companies and 9 Chinese stocks involved in virtual currency mining business

The strictest ban in history: these 29 listed companies involved in virtual currency mining What is the risk?

In the evening of the 25th, the Inner Mongolia Development and Reform Commission published 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 Draft for Public Comments regulates eight aspects, which can be said to be the strictest restriction in the history of virtual currency mining, involving large data centers, communication enterprises, even Internet cafes, individuals, civil servants and other subjects, and penalties include cancellation of preferential policies, revocation of licenses, suspension and rectification, inclusion in the blacklist of defaulters, transfer to judicial organs, and referral to disciplinary inspection and supervision. Judicial organs, transfer to discipline inspection and supervision organs, etc.

A week ago, on May 18, the Inner Mongolia Development and Reform Commission issued an announcement to set up a reporting platform for virtual currency “mining” enterprises to fully accept reports on virtual currency “mining” enterprises. The Inner Mongolia Development and Reform Commission told the Blockchain Daily reporter that it will maintain a high-pressure posture on the regulation of virtual currency mining.

According to the Cambridge Alternative Finance Center, Chinese miners account for more than 65% of the Bitcoin network’s computing power, with Xinjiang, Sichuan and Inner Mongolia occupying 35.76%, 9.66% and 8.06% of the network’s computing power, respectively, ranking among the top three in the country.

The 51st meeting of the State Council’s Financial Stability Development Committee last week clearly proposed to crack down on bitcoin mining and trading practices. It can be expected that other provinces and cities in China may follow the example of Inner Mongolia and introduce stricter measures to combat virtual currency mining, and domestic virtual currency mining will gradually withdraw from the historical stage.

In the face of the sudden onslaught of strong regulation, what will happen to those listed companies involved in virtual currency mining, or mining machine business? According to the incomplete statistics of Blockchain Daily, there are 13 A-share listed companies, 7 Hong Kong listed companies and 9 Chinese stocks involved in virtual currency mining business. The specific list is as follows.

13 A-share listed companies

  1. Xinyuan Technology (300472.SZ): On March 15, 2021, the company signed a sales contract with Jiangxi Shising Technology Co., Ltd. for the Distributed Storage Center Project, in which Xinyuan Technology is responsible for the research and development, supply, installation, commissioning, software configuration and data center maintenance of the arithmetic machines and storage equipment required for the Shising Technology Distributed Storage Center Project, namely Filecoin The construction and maintenance of the mining site. The total amount of the project reached 580 million yuan, accounting for 119.37% of the company’s audited operating revenue in 2019.
  2. Contact Interactive (002280.SZ): announced on May 24, 2021, the company invested $14.3072 million in April 2019 in a project under Aoide Capital Limited. The project invested in mining machines, virtual currency trading and investment in ICO companies. $5.08 million of fair value loss was recognized in 2020, equivalent to RMB35.0398 million.

3, Futong information (000836.SZ): the company holds 3.41% of the shares of Shanghai Baotu Investment Management Center (limited partnership), which holds 4.67% of the shares of Jia Nan Technology. Jia Nan Technology is currently the world’s second largest mining machine production company.

4, ST Hanye (600226.SH): the company contributed 200 million yuan to hold 99.50% of the shares of Shanghai Yongtang equity investment center (limited partnership). Shanghai Yongtang indirectly invested in Hangzhou Jia Nan City Information Technology Co., Ltd. through Baotu Fund, the company’s final holding percentage of Jia Nan Technology is less than 1%.

5, deep science and technology (000021.SZ): announced in January 2018, the company is one of the well-known domestic manufacturers of bitcoin mining machine products, with an output of about 150,000 units or so. The company started to import the business from November 2017, and so far it is still in the introduction period, which has not had a significant impact on the company’s operating results.

6, CYP (300052.SZ): announced in January 2018, its controlling shareholder Baode Technology is a Hong Kong-listed company whose main business is the development, production and sales of high-performance computer service systems. Baode Technology launched the first-generation digital currency miner PM108 in November 2017 and the second-generation graphics card miner PM208 in January 2018, and orders for the two miners have exceeded 1,000 units, mainly sold to Guangdong, Fujian, Jiangsu, Shanghai, Hebei and other places. The company’s wholly-owned subsidiary, Baoteng Internet, plans to combine the remaining bandwidth and arithmetic power with Baode Technology’s mining machines to form a shared cloud pool to engage in digital currency mining for its own use or for lease, and the shared cloud pool business will be carried out in the near future.

  1. ST Chennaixin (002447.SZ): its wholly-owned subsidiary, Trencher Internet (Beijing) Network Technology Co., Ltd, has developed a competing cloud product by introducing blockchain technology, which is a blockchain eSports acceleration infrastructure service device that allows users to contribute idle network bandwidth and arithmetic power through terminals. As of January 2018, 200,000 units of the Trencher Competitive Cloud device were sold through direct sales and agency sales, and more than 500,000 reservation users have been made.
  2. Akcome Technology (002610.SZ): In 2017, its subsidiary Xinjiang Akcome Huicheng Information Technology Co., Ltd. actively carried out power sales and operation and maintenance business of blockchain cloud computing equipment (profitable in that year), operating and managing more than 10,000 bitcoin mining machines in Xinjiang and Qinghai, and later sold 100% equity interest in Xinjiang Huicheng with a transfer price of RMB 60 million and a gain of approximately 41.63 million yuan.
  3. ST Zong Ying (002464.SZ): announced in August 2018 that its subsidiary Caiquan Technology started its business layout in the blockchain field from the second half of 2017, and intends to rely on China’s rapid development in this field, as well as the company’s own technical advantages and industry advantages, to vigorously expand the overseas supercomputing cloud service (mining service) market and become a global comprehensive service provider of cloud computing servers. Form a new profit growth point for the company’s business.

10, Zhuo Yi Technology (002369.SZ): announced in January 2018, the company has been actively laying out the blockchain business since 2015, relying on the company’s long-accumulated ODM of electronic products, and Xunlei to cooperate with the CDN “Moneymaker” in the form of ODM, and now the third generation of goods based on blockchain technology “In early 2017, the company began to develop a multi-GPU high-performance parallel computing system, mainly for AI, blockchain hash operations (commonly known as mining) and other occasions that require high-performance computing, and has completed the trial production can be mass production.

11, China Great Wall (000066.SZ): half-yearly report released in August 2017, in the face of the overall decline in industry demand, especially the traditional PC power supply market demand plummeted unfavorable factors. The company further accelerated the pace of product structure adjustment, seizing the bitcoin network economic hotspots, overseas market demand, to achieve significant growth in the mining machine power business, overseas market business, effectively driving the development of the overall business of power supply.

12、Huatie Emergency (603300.SH): On December 4, 2019, the company received a supervisory work letter from the SSE, the supervision content is: a. Please verify and explain to Chairman Hu Danfeng: whether the company, the actual controller and its related parties are using Huatie Hengan’s bitcoin “mining machine” for mining, and if so, please explain the situation. If yes, please explain the quantity and value of coins mined by the bitcoin “mining machine”, the account opening and actual ownership of the bitcoin account, and whether Hu Danfeng has misappropriation of office and other circumstances that damage the interests of the listed company. Please ask the lawyer to verify and express an opinion. 2. Please fully verify the rental and use of Huatie Hengan’s bitcoin “mining machine”, and if the above-mentioned act of mining with bitcoin “mining machine” exists, please explain the relevant revenue attribution and cost bearing entity, as well as whether the relevant income, cost and expense were accounted for in the previous financial report. Please also explain whether the relevant revenue, costs and expenses were recognized and disclosed in the previous financial reports. Please check and comment on the annual audit accountant.

  1. ST Three Five (300051.SZ): In November 2013, the company announced that it is mainly considering to be a comprehensive platform for bitcoin, and to act as an agent to sell related value-added services, such as expanding bitcoin-related advertising business, developing bitcoin mining machine, bitcoin trading platform, bitcoin payment intermediary and other businesses.

9 listed Chinese stocks

  1. JANAN Technology (CAN): a bitcoin miner established in 2013, with its main business being bitcoin miners and sales. According to the 2020 financial report, the revenue of mining machines and other products accounted for 95.5%. The mining business of CanTech has been in preparation for a long time and will start operation in the second quarter of 2021, and will increase the number of self-operated mining in the second half of the year.
  2. ebon International (ebon): launched its first dedicated integrated circuit (” ASIC”) mining machine, called Ebit E9 + ASIC machine specifically for mining certain cryptocurrencies, in December 2016. on February 18, 2021, the announcement announced the completion of a securities offering to establish and operate cryptocurrency mining farm to launch bitcoin mining operations.
  3. Ninth City (NCTY): announced on February 8, 2021 that the Company has signed six legally binding memorandums of understanding (MOUs) with six mining machine owners and purchased bitcoin mining machines through the issuance of additional Class A common stock. The equipment will include different brands of Bitcoin miners such as WhatsMiner, AntMiner and AvalonMiner, totaling 10,489 units with a total computing power of approximately 251 PH/S. The miners have been deployed in Xinjiang, Qinghai and Inner Mongolia, etc. On March 19, 2021 its wholly-owned subsidiary NBTC Limited signed the Bitcoin Miner Purchase Agreement. Under the agreement, Ninth City will purchase 24,000 Antminer S19j bitcoin miners, with deliveries scheduled to commence in November 2021. Upon completion of the delivery, Ninth City expects to have a total bitcoin mining machine computing power of 2,160 PH/s.
  4. Bit Digital, formerly known as PointCow Financial (BTBT): On January 19, 2021, the announcement stated that its bitcoin mining business is developing well, the company truly owns 40,865 mining machines, and its bitcoin mining business can be verified by third-party mining pools HuobiPool and Ant Mining Pool, which have been verified by auditors on site. In addition, the announcement disclosed that Bit Digital earned a cumulative total of 1,331.2 bitcoins in 2020.
  5. Sino Global Shipping (SINO): On February 16, 2021, it was announced that a binding Letter of Intent (LOI) has been signed to acquire 51% equity interest in Inner Mongolia Nine Chain Smart Big Data Park Service Co. This transaction is pending completion of due diligence review. According to the official press release, Nine Chain Intelligence owns a 150,000 KW Bitcoin mining computing center and a 50,000 KW Ether mining computing center, accounting for approximately 2.8% of global Bitcoin computing power and 8.25% of Ether computing power, respectively. On March 3, the company announced that it signed a purchase agreement with HebeiYanghuai Technology Co., Ltd. to purchase 2,783 digital currency operation servers with a total computing power of 504,040t/s in a deal worth RMB 30 million (approximately US$4.6 million).
  1. Bit Mining, formerly 500 Lottery (WBAI): On January 11, 2021, 500 Lottery announced in an announcement that the Company expects to issue approximately $14.4 million worth of Class A common stock as consideration for the acquisition of seller-owned bitcoin mining machines. to purchase seller-owned bitcoin mining machines, including models S17, T17, M20 and S9. On February 26, the announcement was made that 500Lottery was purchasing 1,923 bitcoin mining machines as well as 2,000 ethereum mining machines.
  2. SOS Limited (SOS), formerly known as the former P2P platform Xinfu: On January 21, 2021, the company announced that it had entered into a purchase agreement to purchase 14,238 BTC miners, BTC Hash Power (bitcoin arithmetic power) of approximately 527P; and 1,408 ETH miners, the HashPower (ethereum arithmetic power) of about 1056G.

8、Code Chain New Continental (CCNC): On February 23, 202, the company announced that it had signed an asset purchase agreement with Sichuan Rizhan Cloud Computing Company to purchase 10,000 Innosilicon T2T bitcoin mining machines at a price of RMB 40 million (approximately US$6.2 million).

  1. Minyun Tang (MYT.US): announced on May 10, 2021 that it is accepting cryptocurrency payments, including Bitcoin, Ether and Dogcoin, starting this week for all stores in China operated by Hunan Thirty Nine Shop Tea Co. and all restaurants in the United States operated by Guokui Management. Mingyuntang has decided to start blockchain technology research and cryptocurrency mining operations. And management expects a new subsidiary in China to conduct research and development of blockchain-based software and applications, and to advance the commercialization of such applications as well as cryptocurrency mining.

7 Hong Kong-listed companies

  1. FireCoin Technology (01611.HK): On April 22, 2021, the company announced that FireCoin Asset Management (Hong Kong) Limited, a wholly-owned subsidiary of the company, has launched its asset management services to three funds investing in virtual assets and one private equity fund investing in virtual asset mining-related projects. FireCoin Asset Management can only provide services to professional investors.
  2. Xiongan Technology (01647.HK): On January 9, 2021, Xiongan Technology’s Chairman of the Board, Mr. Yao Yongjie, signed a strategic cooperation agreement with Lion Group Holdings with legal effect. Mr. Yao Yongjie will provide technical advice and consultation to the company in the blockchain field as the chief technical advisor. The two parties will cooperate to establish a fund not exceeding USD 800 million, which will be used to jointly promote the development of blockchain technology and industry environment, actively promote business innovation in the digital currency field, and make it easier for customers to participate in the digital currency market. The fund will invest in mining construction, mining business and its upstream and downstream industries including but not limited to Bitcoin (BTC), Ether (ETH) and other digital currencies.
  3. Lotto Hootsuite (08198.HK): Announced on December 2, 2020, the Group has turned to a profitable position in the third quarter of 2020, during which the Group’s big data center services generated revenue of approximately HK$152.6 million. With the commencement of operation of the third big data center in late June 2020, the Group now operates three big data centers and provides a full range of services such as premises, hardware support, power supply, supporting monitoring and management to its customers. The customers of the Group’s data centers are mainly engaged in cryptocurrency mining business.
  4. Sun International (08029.HK): On 29 March 2021, the Group announced that its indirect wholly-owned subsidiary had purchased cryptocurrency mining equipment for RMB50 million. on 24 May, Sun International announced that the Group would support and comply with the instructions of the Chinese government to cease the relevant mining activities in China. In this regard, the Group will discuss with relevant service providers and take necessary actions to ensure the continuation of its cryptocurrency mining activities in other countries or regions.

5、Park Energy Group (01263.HK): The Group is principally engaged in the design, manufacture and trading of graphic display cards for desktop computers, electronic manufacturing services and the manufacture and trading of other PC-related products and components. According to its fiscal 2020 business outlook, NVIDIA recently announced the launch of its Cryptocurrency Mining Processor (“CMP”), which is designed for cryptocurrency mining applications, and Piperformance has been appointed as one of the partners to deliver the CMP solution to meet the demand from cryptocurrency mining.

  1. Synergy Communications (1613.HK): On April 19, 2021, Synergy Communications announced that it entered into a share subscription agreement with Yao-Leader Limited, under which the transaction was completed with Synergy Communications holding 3.33% of the shares of Yao-Leader Limited. Mainly engaged in blockchain and distributed cloud computing related open intelligent blockchain platform and storage mining technology (storage mining technology).
  2. Yu Xing Technology (8005.HK):May 14, 2021 announced that it signed a $290 million cryptocurrency equipment purchase agreement with Wuhan Quan Yaocheng Co., Ltd. The equipment is 2,416 units of A10 pro 6G version and 7G version equipment owned by the seller for cryptocurrency mining.

Special Note: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk.

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