- Chinese Bitcoin miners are facing an existential threat as they are having difficulty paying their electricity bills
- A crackdown on cryptocurrency exchanges by Chinese authorities has led to miners being unable to sell Bitcoin in order to pay their bills
- Mining operations could be forced to close if they can’t find an exit route for their Bitcoin
Chinese Bitcoin miners are having difficulty paying electricity bills due to an inability to turn Bitcoin into Chinese yuan, according to the Twitter account for Chinese cryptocurrency reporter Wu Blockchain. A crackdown by Chinese authorities on cryptocurrency exchanges, including over the counter (OTC) desks, has led to miners being unable to sell their Bitcoin and pay their bills, with 74% claiming to have been affected in some way.
Exchanges and OTC Desks Under the Microscope
Wu Blockchain reports that a government-backed “card breaking” operation, which has seen the government crack down on bank accounts connected to cryptocurrency operations due to the potential for money laundering, including the OTC desks that Chinese Bitcoin miners also use. This crackdown has led to a large number of bank accounts belonging to Chinese miners being frozen, with some suffering “heavy losses” as a result.
Chinese Bitcoin Miners Could Get Usurped
The scale of the issue was laid bare by Wu Blockchain who revealed that 74% of the miners they surveyed said that the payment of electricity bills has been “greatly affected” by the Chinese government’s actions, with the threat of closure a real worry should the crisis continue.
This, as Wu Blockchain states, would hand the advantage to the likes of the United States and Kazakhstan in the Bitcoin mining stakes. The two countries have taken huge steps recently to wrestle some of the Bitcoin mining dominance from China, and, although the country is still the biggest Bitcoin miner in the world, Chinese Bitcoin miners could soon see their domination on the wane.