companies could get blocked from preferential government policies.
Inner Mongolia’s tough stance on mining began in March after it announced plans to ban new cryptocurrency mining projects and shut down existing activity to cut down on energy consumption.
China’s crackdown on cryptocurrencies began in 2017 when it forced local exchanges to shut down and banned initial coin offerings.
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A bitcoin mine near Kongyuxiang, Sichuan, China on August 12, 2016.
A bitcoin mine near Kongyuxiang, Sichuan, China on August 12, 2016.
Paul Ratje | The Washington Post | Getty Images
GUANGZHOU, China — China’s Inner Mongolia region has proposed punishments for companies and individuals involved in digital currency mining as it looks to further crack down on the practice.
The move comes after Chinese Vice Premier Liu He said last week in a statement that it is necessary to “crack down on Bitcoin mining and trading behavior” to prevent the “transmission of individual risks to the social field.”
Those comments were seen as Beijing’s intentions to continue a four-year crackdown on bitcoin trading and other cryptocurrency-related activities.
Inner Mongolia’s latest draft proposals aim to target companies such as telecommunications and internet firms engaging in virtual currency mining. The Inner Mongolia Development and Reform Commission said such companies could have their business licenses revoked if they are found to be involved in mining.
Cloud computing or data centers could have preferential government support policies they currently enjoy revoked.
There are also harsh punishments for individuals involved in money laundering of fundraising via digital currencies.
Inner Mongolia’s tough stance on mining began in March after it announced plans to ban new cryptocurrency mining projects and shut down existing activity to cut down on energy consumption. The northern Chinese region failed to meet Beijing’s energy use targets in 2019 and subsequently laid out plans to reduce power consumption.
In the case of bitcoin, miners use purpose-built computers to solve complex mathematical puzzles that effectively allow a bitcoin transaction to happen. These miners are rewarded in bitcoin.
