chinese

People’s Bank of China Targets Crypto Companies in Shenzhen Crackdown

18/08/2021 by Idelto Editor

The Shenzhen office of the People’s Bank of China (PBOC) has reportedly set out to correct the business activities of about a dozen companies allegedly engaged in cryptocurrency transactions. According to Chinese media, the entities have been targeted in a crackdown on crypto trading in the city.

People’s Bank of China Cracks Down on Coin Trading in Shenzhen

The branch of China’s central bank in Shenzhen is cracking down on illegal cryptocurrency trading, the Chinese business news outlet Cnstock.com revealed Tuesday. As part of the new campaign, the PBOC has “rectified” 11 companies “suspected of carrying out illegal virtual currency activities,” the report detailed.

According to the article, the regulator has also identified a local financial website accused of illegally advertising foreign exchange cash deposit transactions. Furthermore, the People’s Bank of China has investigated eight cases involving illicit online foreign exchange operations and cross-border stock trading.

It’s unclear whether the targeted entities have been allowed to continue with their other business activities. According to Chinese crypto journalist Colin Wu, also known as ‘Wu Blockchain’ on Twitter, the PBOC has shut down the 11 firms.

The Shenzhen branch of the Central Bank of China recently launched a special crackdown on illegal cryptocurrency trading activities and shut down 11 companies suspected of conducting illegal virtual currency activities.

— Wu Blockchain (@WuBlockchain) August 17, 2021

Besides the crypto trading crackdown, the regional office of the Chinese central bank has also embarked on a mission to help consumers and businesses avoid violations of current financial regulations. The initiative includes an educational program devoted to financial risk prevention. The branch has organized teams of experts who will provide door-to-door services to over 3,000 companies in order to improve their handling of foreign currency matters.

The regulatory campaign in Shenzhen comes amid an ongoing offensive by the Beijing government against activities related to decentralized digital currencies across the country. It also coincides with efforts to promote the use of the new national digital yuan currency, a CBDC issued by the People’s Bank of China.

In May, the State Council, the executive power in China, vowed to turn its attention to cryptocurrency mining and digital asset trading as part of its push to establish control over financial risks and reach its long-term environmental goals. This year, Chinese central authorities reiterated previous warnings regarding the crypto industry.

Do you think the People’s Bank of China will expand its crackdown on crypto activities in Shenzhen? Share your expectations in the comments section below.

Crypto Crime Falls in China, Surges in Hong Kong, Reports Reveal

04/08/2021 by Idelto Editor

China’s cryptocurrency transactions related to criminal activities have decreased significantly over the past couple of years, a new report suggests. At the same time, its special administrative region of Hong Kong is seeing a spike in crypto-related crime this year, with authorities attributing the rise to the popularity of crypto investments.

Chinese Crime-Related Crypto Transactions Drop, According to Chainalysis

China has been a leader in the global crypto space, not only because of its control over a large portion of bitcoin’s hashrate but also in terms of activity of its crypto businesses and users. With the current government offensive on decentralized money, however, including a crackdown on cryptocurrency mining and trading, the role of the People’s Republic is likely to diminish. That has already happened with China’s share in crypto-based crime, according to a report by Chainalysis.

Between April 2019 and June 2021, Chinese crypto addresses sent over $2.2 billion worth of digital currency to addresses linked to illicit activities such as scams and darknet markets, and received over $2.0 billion, the blockchain forensics firm revealed on Tuesday. But the country’s transaction volume with such addresses has significantly decreased over the two-year period. That trend is valid both in regards to value and in comparison with other nations, the research indicates. Chainalysis commented:

While China remains one of the top-ranked countries for illicit transaction volume, it used to beat all others by a wide margin, suggesting that cryptocurrency-related crime in the country has fallen.

Most of China’s illicit cryptocurrency flows have been associated with scams, the report notes. According to its authors, the drop is largely due to the absence of large-scale Ponzi schemes like the 2019 Plustoken scam, the proceeds from which were often laundered through Chinese platforms. Quoted by Reuters, Global Public Sector Chief Technology Officer at Chainalysis Gurvais Grigg explained:

This is most likely because of both the awareness raised by PlusToken, as well as the crackdowns in the area.

Other fund movements related to crypto crime have had to do with money laundering, often involving the OTC desks of mainstream digital asset exchanges, as well as with fentanyl trafficking — with China being a hub for the global trade of the pain medication, in many cases facilitated by cryptocurrency transactions.

Hong Kong Registers Spike in Crypto-Related Criminal Cases

Meanwhile, authorities in Hong Kong have identified an opposite trend. As the mainland puts more pressure on the crypto space, criminal activity involving cryptocurrency in the city has reached record levels this year, according to a report by the crypto news outlet Forkast.

Close to 500 crime cases have been registered in the first half of 2021, the publication announced. This year’s losses are amounting to 214 million Hong Kong dollars ($27.5 million), which is almost double the total from last year.

Law enforcement officials have attributed the surge to the growing popularity of crypto investing in China’s special administrative region. People spending more time online during the Covid-19 pandemic is considered another major factor as this has given scammers more opportunities to lure individuals into fraudulent schemes.

Money laundering, investment scams, robberies, and face-to-face transactions are the most common sources of crypto crime in Hong Kong. The report also notes that the city is not the only jurisdiction affected by rising crypto crime, pointing to an average annual increase of 300% in similar cases registered in the U.S. between 2017 and 2020.

What are your thoughts on the findings of the two reports? Let us know in the comments section below.

Bitmain to Host Miners in 180-Megawatt Data Center in Kazakhstan

24/07/2021 by Idelto Editor

Bitmain to Host Miners in 180MW Data Center in Kazakhstan

Crypto mining hardware manufacturer Bitmain has partnered with Enegix to host Antminer S19 Pro devices in one of the world’s largest data centers. The facility located in Kazakhstan is designed to accommodate more than 50,000 mining rigs.

Bitmain to Work With Mining Facility Operator Enegix

Leading mining equipment producer Bitmain has announced a partnership with Enegix. As part of the agreement, the ASIC giant will host Antminer S19 Pro miners in a 180MW facility operated by Enegix in Kazakhstan, which is one of the largest in the world.

Enegix focuses its business efforts on designing, building, and operating data centers since 2017, a press release published by Bitmain details. The one in question was commissioned in late 2020 and is the company’s third such facility. Its total capacity exceeds 50,000 current-generation mining rigs.

Commenting on the new project, Bitmain Mining Division Vice President Du Shisheng noted that his company is pleased to have a solid strategic partner in the region and stated:

Enegix is a clear leader in design and operation of large-scale mining facilities. Their success over the years has put them on the map for all major bitcoin miners.

“Enegix is pleased to be able to offer Bitmain the remaining capacity of its 180MW facility. This step from the leading manufacturer of ASIC miners is very important for our company, as it shows trust in our operation,” Enegix CEO Yerbolsyn Sarsenov added. He expressed hopes that the cooperation will be beneficial for both companies and continue into the future.

Enegix to Build More Mining Centers in Kazakhstan

Enegix plans to further expand its activities in Kazakhstan in response to surging demand from cryptocurrency miners. The company wants to develop additional mining infrastructure and is working on design projects for new mining facilities in the Central Asian republic. Enegix is also negotiating agreements for the purchase of electricity to power the crypto farms.

Amid an ongoing crackdown, Chinese companies involved in cryptocurrency mining have been migrating to friendlier jurisdictions in the region, most notably Kazakhstan. In May, Shenzhen-based Bit Mining announced it’s planning to build a 100 MW mining data center there, in partnership with two local companies.

According to a study by the University of Cambridge, the country has seen a six-fold increase in its share in global bitcoin extraction in less than two years. It now ranks third in the world by crypto mining volume. However, the government in Nur-Sultan decided to introduce a surcharge for electricity used by mining entities. The local crypto industry expressed concerns the move could turn away potential investors.

Do you think Kazakhstan will remain an attractive destination for cryptocurrency miners? Share your thoughts in the comments section below.

China’s Anhui Province to Shut Down Crypto Farms as Grid Operator Issues Closure Notice, Reports

14/07/2021 by Idelto Editor

Anhui has reportedly become China’s latest region planning to end cryptocurrency mining. The province is going to shut down all mining facilities due to power supply shortages, according to local media. Another source revealed that the state-run network operator has issued a closure notice for bitcoin farms across the country.

Anhui to Halt Bitcoin Mining Amid Electricity Shortage

The Eastern province of Anhui has joined what’s become a long list of Chinese regions where cryptocurrency miners are no longer welcome. According to media reports, provincial authorities want to shut down mining facilities and also prevent new energy intensive projects in order to address the power deficit in the province.

According to a local news portal owned by the government-affiliated Hefei Media Group, which was quoted by Reuters and Bloomberg, the plan is to close down all crypto mining farms to deal with a serious supply shortage of electricity over the next three years. The report says data centers will be built in the future but in an orderly manner.

Officials expect electricity demand in Anhui to reach 73.14 million kilowatts in 2024. That compares to the current supply of 48.4 million kilowatts, highlighting a growing gap which the local government intends to mitigate. Besides banning crypto mining, the province is also preparing to adjust electricity pricing with the aim of stimulating more economic power consumption.

State Grid Corporation of China Issues Closure Notice for Crypto Mining

Global Times, an English-language newspaper under the People’s Daily, also shared the news on Twitter. The state-run publication added that “By now, nearly 90% of #China’s #Bitcoin mining capacity has been shut down.” Although Anhui is not a coin minting hotspot, its move underscores the ongoing crackdown in the country which has already affected mining hubs such as Sichuan, Xinjiang, Qinghai, Yunnan, and Inner Mongolia.

Meanwhile, Chinese crypto journalist Colin Wu, also known as ‘Wu Blockchain,’ tweeted on Wednesday that the State Grid Corporation of China (SGCC) has issued a closure notice for cryptocurrency mining operations across the People’s Republic. The measure concerns “all parts of the country” and the post detailed:

At present, some provinces with insufficient power in China, such as Henan and Anhui, have also begun to implement it.

Wu Blockchain later revealed that Gansu, a province in Northwestern China, has received the notification from the SGCC as well. The network operator “manages the vast majority of China’s electricity, but this notification appears to be formal,” the journalist explained in a comment on the latest developments in the battered crypto mining industry of China.

What do you think of this latest episode in China’s crackdown on cryptocurrency mining? Share your thoughts on the subject in the comments section below.

China Has Dispersed Over $40 Million of Digital Yuan in Red Envelopes, Report Reveals

11/07/2021 by Idelto Editor

China, which has arguably the most advanced digital currency project among leading nations, has so far handed out more than $40 million in red envelopes with digital yuan. The promotional campaign for the CBDC is currently focused on five major cities, taking into account their regional development priorities.

Beijing Gives Away 269 Million Yuan in Digital Currency

Chinese Authorities are rapidly moving forward with the pilot implementation of the digital yuan, the central bank digital currency (CBDC) issued by the People’s Bank of China. Since the announcement of the concept in 2014, the project has entered its seventh year of development, with large-scale trials across the mainland and cross-border tests with Hong Kong.

The ‘red envelope’ campaign, which was launched to put the digital yuan into the hands of Chinese consumers, has been expanding. The amount of funds distributed to Chinese citizens in digital RMB red envelopes has exceeded 269 million yuan, or around $41.5 million, according to a report by the Tuoluo Research Institute.

In Chinese tradition, the red envelopes are small packets with money usually given to children, family members, friends, or employees, and intended as a good luck wish. The red color in China is perceived as a symbol of energy and happiness.

Published by the Chinese crypto news outlet 8btc, the article reveals that the government efforts are currently focused on five major cities – Shenzhen, Suzhou, Beijing, Chengdu, and Shanghai. Authorities there have issued red envelopes with digital RMB for a total of 230 million Chinese yuan, approximately $35 million.

China Accelerates and Expands Digital Yuan Promotion

The report notes that the central government is “taking into account regional development strategies, and the frequency and scope of the promotion are accelerating outward.” For example, in Beijing, where local financial authorities recently announced a lottery to disperse 40 million worth of digital yuan ($6.3 million), the digital RMB program is mainly focused on the upcoming Winter Olympic Games.

Two pilots have progressed significantly in the Chinese capital. As part of the first one, selected merchants in the Wangfujing business district and the online marketplace JD.com started accepting digital yuan payments. Then, the second pilot project will focus more on the food, housing, transportation, travel, shopping, entertainment, and information scenes of the 2022 Beijing Winter Olympics.

Meanwhile, the economic and financial hub Shenzhen has already distributed 60 million yuan in digital RMB red envelopes (over $9 million). Application scenarios for the CBDC have gradually covered government affairs such as medical care, education, and transportation as well as consumption. More than 30,000 merchants in the city are now working to introduce support for digital yuan payments.

Chengdu has until now handed out 40 million of digital yuan (over $6 million). At least 11,000 merchants are participating in the pilot. They come from various sectors including catering, retail, and entertainment. Chengdu also launched a digital yuan trial in the public transportation system in the city’s administrative area. Tuoluo remarks that Chengdu’s red envelope program “highlights the characteristics of digital currency – small-value, high-frequency trading and inclusive finance.”

What do you think about China’s red envelope campaign to promote the adoption of the digital yuan? Let us know in the comments section below.