Hong Kong-based cryptocurrency mining giant BIT Mining said it would be ending its operations in China after the country pushed new regulations banning the practice.
BIT Mining said it was exiting the mainland China market and ceasing its registration of new users from mainland China to comply with local regulations.
The company said it expects to begin retiring accounts of users in mainland China on Friday.
“BTC.com’s discontinuation of service to users in mainland China may adversely impact the consolidated financial statements of the company,” the company said.
“However, the company believes that its growth in global markets will help offset the loss of business in mainland China. Going forward, the company plans to intensify its business expansion efforts and accelerate its global development.”
In May, Chinese vice premier Liu He said the country needed to take a firmer stance against cryptomining. The statement from He led to multiple cryptocurrency mining operators shutting down their activities, according to Reuters. Crypto exchange Huobi’s subsidiary Huobi Mall said it was suspending its local business earlier this year and cryptomining operator HashCow said it would stop purchasing new BItcoin rigs. BTC.TOP also decided to halt its activities in China.
Researchers recently estimated that China accounts for more than 75% of Bitcoin’s hashing power or calculations, fueled by China’s access to hardware and cheap power. The Wall Street Journal noted that the mining is bolstered by hydropower centers in Sichuan and Yunnan as well as coal from Xinjiang and Inner Mongolia.
Last month, China’s central bank reiterated its stance on cryptocurrency, releasing a memo that banned cryptocurrency transactions and made it illegal for overseas exchanges to provide services to people in China.
Kim Grauer, director of research at blockchain analysis company Chainalsysis, told ZDNet that the mining crackdown is prompting individual miners who were based in China, in addition to big commercial mining operations there, to flee in droves for alternative locations.
“We can already see the outflow as Bitcoin’s overall hashrate fell by more than 50%, remaining below its pre-crackdown peak. Some are predicting a surge in neighboring Kazakhstan, while others even believe parts of North America will see an influx of miners. It’s just too early to know right now based on our data,” Grauer said.
“It’s hard to predict what China’s hard stance against mining means for the larger cryptomining ecosystem, but many believe it will impact market volatility for investors while others argue that if well-considered measures are taken, it could present a huge opportunity for the US to be home to the future of crypto.”