It is rumored that bitcoin and cryptocurrency mining is banned in China. Local miners have stated that although the volume is down, mining is not banned yet.
Rumors and Unsubstantiated reports
The secret to China’s success in profitable mining operations is cheap electricity. However, Sichuan Electric Power Company released an unsubstantiated pamphlet stating that using electricity to mine and produce bitcoin was illegal. Caijing, a news publication based in Beijing, reported on the pamphlet sent out by Sichuan Electric and more media outlets picked up the story.
One of the premier news sources for the Chinese cryptocurrency market, Cnledger, quickly negated the report after Sichuan Electric Power Company revealed several mistakes and unverified claims.
Cnledger reported, "The head of that company has clarified that they made mistakes on the statement, as they are not a government administrative department, and have no rights to determine whether bitcoin mining is illegal."
Further news releases from Sichuan Electric stated that the firm released the notice calling bitcoin mining as illicit. However, executives of the power company stated that the pamphlet was released too quickly and before verification.
Further clarification was made by the CEO and stated to Caixin that the notices were sent out in error. It is not Sichuan Electric's duty to state whether bitcoin mining is illegal. To make matters clearer, it is noticed that Sichuan Electric is not connected to the national grid, and gets its power from local stations.
Government and State-Owned News Publication Clarify
Caixin, a state-owned business and finance publication, further stated that the Chinese government has no intention of shutting down bitcoin mining or any activity concerning cryptocurrency yet.
Furthermore, it is important to note that a potential bitcoin mining ban in China has not happened. Bitcoin mining is still legal in China.
CnLedger states that Caixin reiterated that the six stations are not grid power suppliers. The electricity they produce is wasted power and not legal. Caixin contacted the regulators and were again told that cryptocurrency mining is not being shut down.
An unverified pamphlet from a country grid operator led to these false reports concerning the legality of bitcoin mining. The government and the state-owned press have emphasized that China has no intention of banning bitcoin mining.
It is predicted that the Chinese government will provide the regulatory framework to govern cryptocurrency trading and bitcoin mining. There may be cryptocurrency trading resumption under the need for Know Your Customer (KYC) and Anti-Money Laundering (AML) policies.