As Chinese authorities make it even harder than ever to exchange crypto-currency into fiat, miners could also be forced to maneuver to other jurisdictions, native sources added.
Earlier on Monday, cryptocurrency firm blogger Colin Wu tweeted that miners in China are struggling to buy electricity after the authorities started cracking down on OTC brokers within the country.
The tweet added that “74% of the miners surveyed told Wu that the payment of electricity bills has been greatly affected.” China recently added blocking bank accounts and cards involved in purchases of cryptocurrency, and has investigated the 2 leading brokers, Zhao Dong and Xu Mingxing, Wu added within an official web-blog post.
It’s presently a “challenge” for Chinese miners to convert Bitcoin [BTC] or Tether [USDT] into yuan as “several individuals have had their bank accounts frozen when exchanging crypto-currency for [renminbi] on OTC platforms,” added Thomas Heller, formerly a global business director at the mining pool F2Pool and now a COO of mining and media firm HASHR8.
As reported earlier, in June, Chinese authorities ramped up efforts to dam bank accounts that would be linked to illegal activities like money laundering via crypto-currency deals.
“It has always happened, but this year over others,” Heller explained. “I would say it’s become more common within the last couple of months.”
However, he played down the size of an exodus of miners from China, though HASHR8 is presently assisting some operators to maneuver their operations – most to Russia but some to Kazakhstan.
“Most Chinese miners are mostly only conversant in the Chinese market, so it’s hard for them to maneuver abroad and begin mining,” Heller explained. “It’s the China OTC clampdown another factor which will make overseas mining more attractive, however, this alone isn’t enough to push them overseas. Rather, they might attempt to find some workarounds.”
Moreover, some operators are unplugging their miners, Wu added within an official web-blog post. “There are also miners who said that their mining machines are pack up for a month as they can’t sell the cryptocurrency to pay the electricity bill.”
While some OTC firm that specializes in serving mining firms “have also terminated their business,” Wu added.
Most of the leading mining pools are based in China. An interactive map from Cambridge University’s Centre for Alternative Finance shows that the nation’s miners presently account for nearly 72% of the typical monthly Bitcoin [BTC] hash rate, that’s the computing power dedicated to supporting the network.