Berita 24 English - Cryptocurrency miners, including HashCow and BTC.TOP has suspended operations in China following Beijing's stepped-...
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Berita 24 English - Cryptocurrency miners, including HashCow and BTC.TOP has suspended operations in China following Beijing's stepped-up crackdown on bitcoin mining and trading, hammering digital currencies in the face of increased global regulatory scrutiny.
The crackdown was announced late Friday by a State Council committee led by Vice Premier Liu He as part of efforts to ward off financial risks. It was the first time the council took aim at virtual currency mining, a lucrative industry in China that accounts for up to 70% of the world's cryptocurrency supply.
Exchange of cryptocurrencies Huobi suspended both cryptocurrency mining and trading services to mainland Chinese customers on Monday, stating that it would instead focus on international business.
Bitcoin.
TOP, a cryptocurrency mining pool, also announced the suspension of its China operations, citing regulatory concerns, while HashCow, a cryptocurrency mining company, announced a halt to new bitcoin rig purchases.
Crypto miners employ increasingly powerful, custom-built computer hardware, or rigs, to verify virtual coin transactions, a process that results in the creation of new cryptocurrencies such as bitcoin.
"Crypto mining consumes a lot of energy, which contradicts China's carbon neutrality goals," Chen Jiahe, a chief investment officer of Beijing-based family office Novem Arcade Technologies, explained.
Additionally, the crackdown is part of China's stepped-up campaign to curb speculative cryptocurrency trading, he added.
Bitcoin took a hit following China's latest movie and is now nearly 50% lower than its all-time high. It fell as much as 17% on Sunday before paring some losses and trading steadily in Asia at the time of writing. Additionally, Ether fell to a two-month low on Sunday, falling 60% from a record high reached just 12 days ago.
Global financial regulators are particularly concerned with investor protection and money laundering as they consider whether and how to regulate the cryptocurrency industry.
The recent upheaval in digital currencies is also a result of increased scrutiny in the United States. US Federal Reserve Chairman Jerome Powell stated last Thursday that they pose a risk to financial stability, implying that additional regulation of the increasingly popular electronic currency may be warranted.
Huobi announced the news via its official Huobi Mall Telegram community and a statement to Reuters. BTC.TOP and HashCow could not be reached for comment immediately.
DARK ACTIVITIES
According to a study recently published in Nature Communications, China's cryptocurrency miners' annual energy consumption is expected to peak in 2024 at approximately 297 terawatt-hours, more than Italy's total energy consumption in 2016.
President Xi Jinping of China has committed to achieving carbon neutrality by 2060.
China has already lost its status as a global cryptocurrency trading hub following Beijing's 2017 ban on crypto exchanges.
"Eventually, China will lose crypto computing power to foreign markets as well," BTC.TOP founder Jiang predicted in a microblog post on Weibo.
Chen of Novem Arcae stated that if the crypto craze is not contained, it risks devolving into froth similar to the Dutch tulipmania of the 17th century, which is frequently regarded as the world's first financial bubble.
"The only difference is that after the tulip bubble burst, some lovely flowers remained," Chen explained.
"However, when the virtual currency bubble bursts, all that remains are a few computer codes."
