China’s crackdown on the cryptocurrency industry has intensified with regulators now targeting miners who have tried to hide their operations as data research and storage facilities.
Inspections intensified this month in several Chinese provinces, targeting illegal mining activities at universities, research institutions and data centers. Regulators in China say they are concerned about cryptocurrency mining’s impact on power supplies ahead of the upcoming winter.
The new round of scrutiny could further depress the amount of crypto mining occurring in China, which for years had been the dominant player and, as recently as April this year, had a 46% share of the global hash rate, a measure of computing power used in mining and processing cryptocurrencies such as Bitcoin and Ethereum.
Both Bitcoin’s price and the global hash rate tumbled after China cracked down on the industry earlier this year, though they’ve since recovered. And while plenty of miners have fled China, some have tried to continue operating within China by shifting into lesser-known tokens and decentralized storage technologies.
In the northern province of Hebei, which accounts for a small share of the crypto mining industry, local agencies are requiring companies and institutions to avoid cryptocurrency mining with their computing systems and asked for a self-compliance check before September 30.
A massive expansion of crypto mining would “seriously affect economic and social development and directly threaten national security,” the local Internet regulator said in a written statement.
China’s government has also said that it will start a mechanism to monitor and follow computing activities regularly in October. Officials responsible for the data systems where irregular mining is found will be punished, and related Internet connections will be cut off, the government said.
