Earlier this year, the Chinese government reportedly outlined plans to limit energy use by cryptocurrency miners and encourage their “orderly” exit from the industry. In the wake of intensified crackdown efforts, some of China’s largest miners opened operations abroad, but it seems at least one mining group tried to operate underground instead.
Earlier this week, police in the city of Tianjin said they seized 600 bitcoin mining computers and eight high-power fans, according to a report from Chinese news agency Xinhua. Authorities took action after the local electricity company noticed unusual electricity consumption on one line. At its peak, there was a 28 per cent increase in line loss, indicating increased load. Police reportedly called it “the largest power theft case in recent years.”
Investigators say that the electricity meter for the suspected cryptocurrency mining operation had been short-circuited, which was likely an attempt to dodge the electricity bill. Five people are reportedly currently under investigation and another person has been detained.
According to Reuters, the central bank of China told a government internet banking group around the beginning of this year that the agency can instruct municipalities to regulate cryptocurrency mining operations’ power use, as mining requires large amounts of energy and computing power. This followed action in September, when the country banned ICOs and domestic cryptocurrency exchanges.
Before China’s government began cracking down on cryptocurrency mining, the country was a haven for mining operations, thanks largely to an abundance of hardware manufacturers, cheap labour, and cheap electricity. It seems the Chinese government is most interested in regulating that last factor in its quest to rid the country of cryptocurrency mining operations.