The Chinese government blocks several bank accounts and cards of miners and merchants engaged in Bitcoin mining activity within the Sichuan Province. So that is taking drastic measures to prevent mining activities and the use of cryptocurrencies within the country.
The shocking news was reported by local media in the Asian country. The media reports that There is great panic and annoyance in the crypto community around these measures. Measures that leave miners and several merchants who accept cryptocurrency operations without access to their funds.
According to the Chinese government, the measure taken that blocks cards and banking products from miners was taken as an action to combat money laundering. Therefore, this regulation also includes over-the-counter (OTC) trading. In this way, several are affected by the blocking of their banking products.
Likewise, a Bitcoin miner who was dedicated to this activity in Sichuan province explained that his card was suddenly blocked. For this reason, he immediately contacted the corresponding banking entity to find out the cause. The response from this entity is that he had to prove that he was not involved in illegal activities. And therefore, the money he had in his account was of good origin and not the product of money laundering.
However, just as it happened to this Bitcoin miner, many other miners and OTC traders have been terribly affected. Especially considering the economic crisis that is currently being experienced worldwide.
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Why does the Chinese government block miners' bank cards?
The main causes of these measures are presumed to be because miners, when obtaining bitcoins or any other cryptocurrency, need to sell these coins. With the aim of being able to cover their operating expenses and other needs.
However, in this sale, it is very easy for miners to exchange their bitcoins for stolen or illegally sourced fiat money. Therefore, the competent authorities in Sichuan province received specific orders to stop any type of suspicious activity. Thus, they took the action of freezing the bank accounts and cards of several miners. Due to this, Now they must prove the origin of their funds to be able to unlock them.
Likewise, OTC businesses have also been affected by the implementation of this measure. However, in the case of these merchants, the consequences do not seem to be entirely serious. Since they have been collaborating for some time together with the police teams in the area, to prevent illegal activities such as money laundering from being carried out within their spaces.
For its part, it is estimated that this massive wave of freezing in banking products is also due to the fact that Sichuan province is one of the Bitcoin mining paradises that exist in the region. From which comes a large part of the hash rate that the Bitcoin network currently has. According to analysis carried out by the digital asset manager coinshares, approximately 54% of all the computing power that the network has worldwide comes from Sichuan.
Thus, it is estimated that for some time, the government has been taking measures to close Bitcoin mining farms. This with the supposed purpose of reducing energy consumption. Although it should be noted that the majority of mining farms located in this region do not use the national electricity supply. But on the contrary, they use hydroelectric energy sources close to them, which in many cases are built by the mining companies themselves.
It is not the first attack by the Chinese government against cryptocurrencies
Since cryptocurrencies were launched on the market, China has maintained an unfriendly attitude towards this new form of money. Although it supports and supports blockchain technology, to the point of almost launching its blockchain-based digital yuan currency, the case with cryptocurrencies is hostile.
However, since approximately 2018, the country changed its position somewhat, and allowed mining within the nation. This as a strategy for China to choose to adopt and implement blockchain technology more quickly.
Even so, despite showing a certain level of tolerance, with the measures recently implemented against miners in Sichuan province; where the largest number of miners are located globally, it is clear that the country's position continues to be against these assets.
With these types of measures, what has been discussed for years in the cryptographic community is once again exposed. And at Bit2Me, we have also emphasized countless times: In the traditional financial system we are not the owners of our money. On the contrary, it is the government, banking and financial entities that have control over our resources. And therefore, they can impose regulatory measures on us unexpectedly whenever they wish, regardless of the effects they may cause.
So far, orders freezing banking products to miners and OTC traders have only been imposed in Sichuan province. At the moment, there are still no statements or confirmations as to whether these measures will be extended to the entire country.
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