DD Support Board and Research Team

[scion]

China Quietly Orders Closing of Bitcoin Mining Operations

Move tightens a clampdown that already has shut exchanges for trading of cryptocurrencies in China

By Chao Deng Updated Jan. 10, 2018 10:22 a.m. ET
https://www.wsj.com/articles/china-quietly-orders-closing-of-bitcoin-mining-operations-1515594021

BEIJING—Bitcoin can’t catch a break in China.

Chinese authorities ordered the closing of operations that create a large share of the world’s supply of bitcoin, tightening a clampdown that has already shuttered exchanges for the trading of cryptocurrencies in China.

A multiagency government task force overseeing risks in Internet finance issued a notice last week ordering local authorities to “guide” the shutdown of operations that produce, or “mine,” cryptocurrencies, according to the notice and people familiar with the information.

While the notice called for an “orderly exit” without setting a deadline, far-flung areas of China where cryptocurrency mining operations have flourished are complying. A local regulatory official in the far western region Xinjiang said Wednesday that his agency received the notice and is doing “what the country wants.”

The central bank, the lead agency in the task force on Internet financial risk that issued the notice, didn’t respond to a request for comment.

Miners use powerful computer systems to solve complex math problems to generate and verify units of cryptocurrencies. The miners have thrived in sparsely populated areas of China where electricity is plentiful and inexpensive and temperatures are cooler.

Their winding down is the latest blow for bitcoin and other cryptocurrencies in what was a promising market but where the government is concerned about money laundering and risks in the financial system. China accounted for nearly 80% of computer power devoted to global bitcoin mining over the past 30 days, a rough approximation of its share of new units created in the same period, according to calculations based on data from ChainalysisInc., a New York-based research firm.
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https://www.wsj.com/articles/china-quietly-orders-closing-of-bitcoin-mining-operations-1515594021