Briefing: Authorities probe illegal bitcoin mining farms in Sichuan

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China Authorities Probe Alleged Illegal Bitcoin Mining Sites at Hydro Plants – Coindesk

What happened: Chinese authorities have reportedly launched an investigation into bitcoin mining farms at hydropower plant sites in southwestern Sichuan Province that were allegedly built without approval from the local government. The Economic and Information Bureau of Sichuan’s Garze county, an area known for its abundant water resources, has formed a committee with other government agencies to carry out the investigation into illegal mining farm construction. An official from the bureau said bitcoin mining operations are not allowed in Garze county.

Why it’s important: Many mining operators in China set up shop in Sichuan to take advantage of cheap hydroelectric power. An influx of miners return to the region to save on operational costs, especially during the rainy season, from May to September. Facilities located in Sichuan Province account for nearly 50% of the global bitcoin network’s hash rate, a measurement of power usage. Although cryptocurrency exchanges and ICOs are banned in China, crypto mining operations still exist in a legal gray area. However, earlier this year, China’s state planning body proposed phasing out crypto mining altogether.