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Major Chinese crypto mining pool, BTC.com, operated by BIT Mining and owned by the NYSE-listed Chinese lottery service provider 500.com, has started to relocate their mining operations to Kazakhstan.
After the company was notified by the state grid in western Sichuan province that the power supply serving one of its local data centers would be suspended imminently, it started relocating a first batch of mining machines to Kazakhstan.
BTC.com is currently the world’s fifth largest mining pool, validating 10.4% of blocks on the Bitcoin blockchain. The miner was founded by Jihan Wu and operated by Bitmain and Bitdeer until 500.com got their hands on the company this February.
BIT Mining stated the following when it announced the news on Monday:
“On June 19, 2021, the Company’s indirectly held subsidiary, Ganzi Changhe Hydropower Consumption Service Co. Ltd […] received notice […] from State Grid Sichuan Ganzi Electric Power Co., Ltd. […] informing Ganzi Changhe Data Center, that its power supply would be suspended, effective 9:00pm Beijing time, June 19, 2021. Ganzi Changhe Data Center has since suspended its operations. Data centers in Sichuan, including the Ganzi Changhe Data Center, contributed approximately 3% of the Company’s total revenues in the month of May 2021.”
China’s recent crackdown on crypto mining is driven by concerns of the Chinese state over the industry’s carbon footprint, which undermine its environmental targets.
In other provinces, such as Inner Mongolia, at least three mining firms, BTC.TOP, Huobi and HashCow, had to stop mining activities for similar reasons.
BIT Mining is also operating mining centers in Texas and have stressed its ambition to lowering their footprint. Their Chief Executive Officer, Xianfeng Yang has said that:
“We are committed to protecting the environment and lowering our carbon footprint. We have been strategically expanding our operations overseas as part of our growth strategy. Following our investments in cryptocurrency mining data centers in Texas and Kazakhstan, we are accelerating our overseas development for alternative high-quality mining resources.”
It seems that China is more serious about this anti-crypto crackdown than it has been in the past, and the impacts could be more lasting and deeper. While we are seeing an immediate effect on the crypto markets fueled by fear, there could be a net long-term positive if it leads to mining activities spreading to more countries. In addition, there’s no strong, direct line from mining activity to the market price of Bitcoin.
Following the news in the weekend, Bitcoin prices plunged shortly to below $30,000, however it was able to recover shortly after and is currently trading at around $34,000.