China warns state firms against crypto mining, mulls punitive steps

China warns state firms against crypto mining, mulls punitive steps
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(Nov 16): China is warning its own state-owned enterprises (SOEs) to get out of cryptocurrency mining and is considering imposing punitive measures in the form of higher power prices on companies that continue to defy a government ban as Bitcoin trades near record highs.

The National Development and Reform Commission (NDRC) plans to crack down on industrial-scale Bitcoin mining as well as any involvement by state companies in the activity, Meng Wei, a spokeswoman for the nation’s chief economic planner, said at a press conference on Tuesday (Nov 16). The NDRC held a special meeting on the issue last week and is putting a bigger onus on provinces and municipalities to investigate and clean up SOEs involved in mining.

Beijing has cracked down hard on Bitcoin miners this year, blaming them for everything from energy waste to deadly coal mining accidents as the government strives to meet its carbon-neutral goals. Concern over the country’s power supply for the upcoming winter season was one reason for an intensified campaign against miners in September, when officials were said to have gone after those who tried to disguise themselves as data researchers and storage facilities to stay in business. Since then, coal prices have collapsed, making the impact of punitive prices on the cost of electricity less clear.

China expelled a former Jiangxi provincial official for violations including supporting virtual currency mining, the Central Commission for Discipline Inspection said over the weekend. Xiao Yi was accused of abusing his power to introduce and support enterprises conducting virtual currency mining activities against government policies, as well as taking bribes, it said.

Bitcoin tumbled as part of a broader crypto dip, sliding almost 5% to US$60,971.56 (about RM253,952.64) at 2.17pm in Hong Kong. Ether fell as much as 6.8%.