Provincial authorities in Yunnan, southwest China have intensified their attacks on Bitcoin Mining centers. This time, they have ordered the disconnection of 57 virtual farms located in that town.
It should be noted that this region is of capital importance in regards to crypto mining. The same can be said for the neighboring Sichuan province.
Operating without authorization would target Bitcoin mining
Now sanctions are projected, as reported by the Wu Blockchain media, reviewed by the portal news.8btc. Government representatives from Dehong Dai and Jingpo Autonomous Prefecture held a meeting last May. In it, they addressed the issue of “Cleaning in the mining sector, where the dismantling of 57 projects corresponds‘ Big Data ”.
That fifty hundred companies directly related to crypto mining, would have been built without the due authorization of the local government. Additionally, 7 other projects under construction would also have received the dismantling order for the same reason.
On April 13, the authorities ordered, through a document, to “clean” and “rectify” the illegal energy supply.
The “risk” and “tax evasion” are part of the framework
Although the Yunnan Local Government assures that Bitcoin Mining is positive. The same, have helped the usability of abandoned hydroelectric plants. At the same time, they “fear” the risks of misuse of wired connections without proper protocols.
To make the state / crypto mining relationship more difficult, on May 29, an explosion occurred in one of the Yunnan hydroelectric power plants. The result was 6 people dead and 5 others injured. Although the cause of the detonation is unknown, security measures have increased and one of the targets has been the Bitcoin Mining companies.
“Severe Tax Evasion” by cryptocurrency generation centers, it is also a source of concern. This would have been another point in the meeting, according to the aforementioned media.
It must be taken into account that the cost of electricity provided by national networks ranges between 4 and 4.5 cents per kWh. While, with the use of energy from nearby hydroelectric plants, the price drops significantly, which is possibly unattractive to the State.
What is special about the provinces of the extreme southwest?
There are several reasons that drive virtual farm owners to operate in Yunnan and Sichuan provinces. One of them is cold weather, which is a fundamental factor in reducing costs.
On the other hand, there are the already mentioned low electricity prices. Regarding this, it must be taken into account that, in winter, the authorities make calls for large-scale electricity consumption. This is because it is the period of greatest activity of hydroelectric plants.
All these attractions, however, seem to be fading. Inspections, pressure and even power cuts have caused some farms to be looking for ways to leave the area.
China is currently the country with the highest hash power concentrated in the entire world. 65.08% of virtual farms are located in that nation, dwarfing other nations of important rank in the cryptocurrency business. However, the increasing accumulation of problems with the authorities has begun to open gaps and show signs of decentralization.