China accounts for nearly 70% of the world’s cryptocurrency mining, a complex process of producing new crypto-coins that involves sophisticated computers solving cryptographic mathematical problems to verify every digital transaction.
On Friday, the State Council’s Financial Stability Development Committee in China, headed by Vice Premier Liu He, announced a crackdown on virtual currency mining, with spillover effects across the whole. of the crypto market, with Bitcoin falling nearly 50 percent from its high, and as high as 17 percent on Sunday.
The events follow an earlier announcement by China of a crackdown on the use and trade of virtual currencies in the country, barring financial institutions and payment companies from providing services related to cryptocurrency transactions.
Experts had previously predicted that the crackdown could make it harder for people to buy cryptocurrencies in China and create more obstacles for miners to trade virtual coins for yuan.
“Due to recent dynamic market changes, in order to protect the interests of investors, some of the services such as futures, ETPs or other leveraged investment products are temporarily not available for investors. new users from a few specific countries and regions, ”said a statement shared by Huobi with CoinDesk.
Huobi said he would also halt the sale of crypto mining machines and mining hosting services in mainland China, adding that he would provide more details soon on what to do with the machines.
BTC.TOP, a crypto-mining pool, also announced that it will suspend its activities in China due to regulatory risks, hinting that it will now conduct its crypto-mining activities in North America.
“In the long run, almost all Chinese crypto mining platforms will be sold overseas, as Chinese regulators crack down on mining at home. Eventually, China will also lose its crypto computing power to foreign markets, ”Jiang Zhuoer, founder of BTC.TOP, said in a Weibo article.