China Ceased 11 Firms Linked to Illegal Crypto Trading

China Ceased 11 Firms Linked to Illegal Crypto Trading

On Wednesday, August 18, the state-run media of China reported that the country’s central bank cracked down on 11 firms suspected to carry out illegal crypto activities.

Additionally, the Shenzhen branch of the People’s Republic of China pinned down a domestic financial website that illegally advertised foreign cash deposit affairs.

Then, it further investigated eight cases that involved criminal acts of online foreign exchange transactions and overseas stock trading. 

Based on the report, it was unidentified if the targeted companies are still allowed to continue with their other business activities.

Shenzhen’s crackdown campaign is due to the government’s rules against cryptocurrency-related transactions in the country.

This is alongside its efforts in promoting the use of its new Central Bank Digital Currency called “digital yuan.”

Last February 2021, the People’s Republic of China Shenzhen branch shut down eight businesses involved in several illicit activities.

This includes the Bitcoin-backed distribution of wealth management products, crypto promotion as a way of investment, and the introduction of overseas crypto projects to local investors.

Furthermore, the regional office of the central bank of China is working to assist consumers and companies from disobeying its financial laws.

It assembled a group of experts who will issue door-to-door service to more than 3K firms. This is to improve their supervision regarding foreign currency. 

Last May 2021, the State Council of China pledged to focus on bitcoin mining and digital asset trading.

This is part of its efforts in establishing control on financial risks and reaching its long-term environmental objectives.

Last July, the central bank of China and the Local Financial Supervision and Administration of Beijing released a joint statement. 

Both called out companies to inhibit their crypto-related activities.

Bitcoin Mining Revenue Rose after China Crackdown

Meanwhile, the revenue of Bitcoin mining worldwide climbed 57% which is gradually reaching its mid-2020 levels.

In May 2021, the mining volume of the world’s largest cryptocurrency dropped after China’s crackdown on digital assets.

At that time, China ousted almost all Bitcoin miners in the country. Therefore, migrating the majority of the hash rate to Europe and North America.

Before the crackdown, the global hash power peaked at 180 exahashes per second (EH/s) then it drastically fell over 50%. Now, analysts recorded a spike of 25% at 112.5 EH/s.

The rise is due to the increase in mining difficulty which made it more profitable.

Furthermore, the income of Bitcoin miners decreased to 5.6 BTC per exahashes from 9.5 BTC per exahashes after the May 2020 halving.

Nonetheless, their mining account net balance position climbed to more than 5,000 BTC per month in the last two months.