Chinese Authorities Initiate Probe into Illegal BTC Mining Farms

The Sichuan province attracts mining facilities in the rainy season due to cheap electricity.

Authorities in the Sichuan province of China are probing crypto mining firms that are operating without official approval, a local state-owned newspaper revealed.

The Economic and Information Bureau has found many illegal constructions in the mountainous region of Garze, where crypto mining firms are building facilities near hydropower stations without obtaining approval.

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Cheap fuel for crypto mining

Sichuan is a province in southwestern China, and due to the abundance in rainfall and the presence of many upstream rivers, many hydroelectric power plants have been set up in the region.

The local report detailed that over the years, many Bitcoin mining facilities were constructed along the Dadu river in northwestern Sichuan without obtaining authorization for construction from the authorities.

“If [a bitcoin mining farm] is built within the authorized area of a power station for electricity consumption, we need to verify if their usage is legal. If it’s outside the authorized area, then it needs to be dealt with as the construction was not approved,” an official from the bureau told the newspaper.

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The news agency also pointed out a particular mining facility, operating within Ginkang hydropower station that hosts around 50,000 Bitcoin mining units and is in violation of local laws.

“We don’t allow outside investment in the area to be involved in bitcoin. Even for big data projects, we will conduct an investigation into the nature of the data involved before making a decision,” the official added.

A crypto mining hub

The total hash power generated by Bitcoin miners significantly dropped last December, however, with the recent rally of the coin, hash power jumped to nearly 58,000 petahashes per second, marking an 80 percent spike in the figures recorded in December.

A previous Finance Magnates report detailed the intensity in migration of Bitcoin mining firms to the Sichuan province in the rainy season. Some reports even stated that 70 percent of the total Chinese hash power was generated from this region alone.

Media reports also revealed that the Chinese mining hardware manufacturer Bitmain was also planning to deploy 200,000 mining units in southwestern China to gain profits from the cheap electricity generated in the area.

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