China crackdown on crypto-mining in Sichuan

China's crackdown on cryptocurrency "mining" has extended to the southwest province of Sichuan, where authorities ordered cryptocurrency mining projects closed in the major mining centre.

Cryptomining is a big business in China, which accounts for more than half of the global bitcoin production. China's cabinet pledged last month to clamp down on bitcoin mining and trading as part of a series of measures to control financial risks. Other popular mining regions, such as Inner Mongolia, have cited the use of crypto-mining for electricity generated from highly polluting sources such as coal in requests targeting the industry.

Where miners often use hydropower to power the specially designed computer equipment used to verify bitcoin transactions — the crackdown is on a broader scale.

The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice, dated Friday and seen by Reuters, calling for the closure of 26 suspected crypto-mining projects by Sunday.

Sichuan is the second largest bitcoin mining province in China, according to data compiled by the University of Cambridge. Some miners move their activities there in the rainy summer to take advantage of the rich hydropower resources. The notice orders Sichuan's state electricity companies to carry out inspections, make corrections, and report its results.

They should immediately stop providing electricity to the crypto projects they've discovered. Authorities have urged local governments in Sichuan to start combing for and shutting down crypto projects. New projects banned. Other regional mining centers including Xinjiang, Inner Mongolia and Yunnan have ordered crackdowns on bitcoin mining. Friday's notice appears to suggest that Beijing's dissatisfaction with crypto-mining goes beyond cases where electricity from burning coal is used. “Renewable energy is not helping,” said Winston Ma, assistant professor at New York University School of Law and author of The Digital War. "The four largest mining regions - Inner Mongolia, Xinjiang, Yunnan and Sichuan - have implemented similar crackdown measures, although mining in the last two regions is mostly based on hydropower, while the first two are coal-based," Ma told Reuters. Some miners were considering relocating because of the expedition.