Inner Mongolia Closure of Crypto Mining Operations Starts to Slow

Inner Mongolia’s policy of closing cryptocurrency mines has slowed dramatically since last Sept. Since then just four have been forced to shut.

According to a report from the Inner Mongolia Daily detailing efforts at reaching a carbon target, some 49 virtual mining projects have been closed in total. Inner Mongolia is an autonomous region along China’s northern border with Mongolia which is rich in coal and cheap electricity.

In May last year, local crypto mining farms had accounted for 8% of the global Bitcoin mining hashrate, according to the Cambridge Center for Alternative Finance (CCAF).

Inner Mongolia authorities shut 45 mines in the first nine months of 2021

An earlier report from Science & Technology Daily had detailed that authorities had cleaned up and shut down 45 virtual currency mining projects in the first nine months of 2021, which had theoretically saved 6.58 billion kWh of electricity, an equivalent to saving two million tons of standard coal.

The relatively small number of closures since then could indicate that authorities have slowed in their efforts or are nearing completion.

The latter scenario seems unlikely, according to a bombshell report from CCAF last month. After authorities in China had banned cryptocurrency mining in May last year, data had suggested that Bitcoin mining in the country had fallen to zero by July.  

However, by Sept mining activities had quickly recovered to 22.3% of the global hashrate by the following month.

Given the amount of time they have been operating since the ban has been put in place these underground miners appear to “have grown more confident and seem content with the protection offered by local proxy services,” the report explained.

According to an industry insider, these underground Chinese miners have also been trying to diversify their locations. “Miners [in China] use a VPN and try not to use too much energy from a single spot, so the electrical company cannot detect any strange energy consumption,” he said.

Such clandestine operations underway in scattered regions throughout the country could be a reason for the decline in closures so far this year.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.