- Chinese authorities raided a mining operation in Inner Mongolia, confiscating 10,000+ possible Ethereum GPU miners.
- One of the largest Ethereum mining pools globally, Sparkpool, and Huobi crypto exchange have also been forced into closure.
In the latest Chinese crackdown on cryptocurrencies, authorities have seized over 10,000 crypto mining rigs from Inner Mongolia. China’s government announced on Friday a ban on crypto mining transactions. The recent bust is now the first conducted by China’s National Development and Reform Commission (NDRC) since Friday’s announcement.
On Monday, authorities received a tip-off on a crypto mining operation in a retail park warehouse in Inner Mongolia. Upon raiding the site, they discovered 10,100 mining rigs which they seized.
Notably, all crypto mining operations in China were illegalized, regardless of the type of energy they utilize. Crypto mining is an energy-intensive procedure that has even caused blackouts in countries such as Iraq. The NDRC, therefore, warned that it would start monitoring energy consumption levels in the country to fish out miners. The raided firm had a power consumption of 1,104kW/h, reported the state media.
Chinese authorities on Ethereum mining rigs
Until now, authorities are yet to disclose the specific cryptocurrency being mined at the farm. However, the power consumption and the number of rigs likely points to Ethereum Graphical Processing Unit (GPU) miners.
Previous bans placed a higher focus on publicly listed mining companies while smaller firms managed to slip under the radar. However, authorities are now placing greater effort to expose all mining farms in line with the government’s directive.
To prevent a possible clash with these officials, Sparkpool has decided to shut down its Ethereum mining services. The service suspension applies to all its local and international Ethereum mining pool services. Additionally, the Hangzhou-based company, which is the second-largest Ethereum mining pool worldwide, tweeted a total closure scheduled for Sept. 30.
Meanwhile, the real-time Ethereum hash rate has dipped by over 8 percent in the past 24-hours due to Sparkpool’s closure. Even more, one of China’s leading exchanges by daily traded volume, Huobi, was forced to pull out of the region. The exchange will be terminating all existing China-based user accounts by the end year.
All this is indicative of the severity of China’s nationwide crackdown. Not so long ago, the country commanded Bitcoin mining operations and was unrivalled worldwide. As China’s pool of miners shrunk, Bitcoin mining operations became more profitable for the rest of the miners. Bitcoin mining difficulty plunged to historical scales of near 30 percent in May.
With time, however, miners left China and set up shop in friendlier regions such as Northern America and neighbouring Kazakhstan. Reports also suggest that FUD spread from China’s revamped scrutiny of digital assets has had little effect on institutional investors.
Additionally, Bitcoin and the greater crypto market is slowly recovering from Friday’s price hit. On Friday, Ethereum fell to a low of $2,750 but was trading at $2,924 at writing time.