China has been tightening its grip around crypto and crypto businesses. According to recent reports, authorities from Baoshan city in the Yunnan province have cracked down on Bitcoin miners. The authorities have ordered the electricity suppliers to cease supply to the miners in the area.
According to Colin Wu, a Chinese reporter on Twitter, on 30 November several miners informed him of the ban. Wu noted:
“Several miners told Wu that Baoshan, Yunnan, where China’s crypto mines are located, received a ban on November 30, requiring the power station to stop supplying power to the miners. Yunnan is the third largest mining place in China after Sichuan and Xinjiang.”
The above copy of the document appeared to be an official notice about the same.
Despite the current environment in China regarding cryptocurrencies, Wu noted it was not an effort to undermine crypto but an economic decision. Wu added:
“There is no need to overestimate the impact of this incident. The attitude of China local power companies towards crypto mining is often changing. It is more a demand for economic interests than political pressure.”
China contributed 65% of the global Bitcoin hash rate out of which 35.76% was concentrated in the Xinjiang region, while Inner Mongolia, Yunnan, and the capital city of Beijing are key mining areas as well, accounting for 8.07%, 5.42%, and 1.73% of the national hashrate total, respectively. Being one of the largest regions contributing to Bitcoin mining, the cut off may have resulted in the dropping hash rate of Bitcoin over the past couple of days.
The hash rate was at 154.81 Ehash/s on 22 November, which has been dropped to 123.98 Ehash/s. In the past 24 hours, the drop in the hash rate has been by 12.61%.
Even though the decisions were noted to be not motivated politically, the current investigations of crypto exchanges have not provided relief to the crypto community. The recent investigation of OKEx, followed by a rumored investigation of Huobi has put the crypto users and clients in a worrisome state. It will also be interesting to see if such a decision of stopping electricity supply, will be followed by other provinces in China.