Cryptocurrency mining operators, including Huobi Mall and BTC.TOP, are suspending their China operations after Beijing stepped up its efforts to crack down on Bitcoin mining and trading, sending the digital currency tumbling.
A State Council committee led by Vice Premier Liu He announced the efforts late on Friday – the first time the council has targeted virtual currency mining, a big business in China that accounts for as much as 70 percent of the world’s crypto supply.
Crypto miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify virtual coin transactions in a process that produces newly minted cryptocurrencies such as Bitcoin.
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The cryptocurrency market nursed its wounds Friday after a week of pain triggered by a Chinese regulatory warning shot, forced selling and a possible US tax clampdown. If that wasn’t enough, Bitcoin believers are still fuming after onetime proponent Elon Musk did an about-face and criticized the token for its energy usage. Bitcoin fluctuated around $40,000 in Asian trade, down about 9 per cent on the week though up from a Wednesday plunge toward $30,000. Other coins have slumped too, such as Ether’s 17 per cent weekly nosedive. The sour stretch for digital tokens started with Tesla Inc.’s billionaire founder Musk suspending acceptance of Bitcoin payments and trading barbs with boosters of the cryptocurrency on Twitter. China’s central bank added to the downdraft Tuesday after carrying a statement warning against using virtual currencies. On Thursday, it emerged the US may require crypto transactions of $10,000 or more to be reported to tax authorities.
China Hammers Bitcoin Anew With Warning on Miner Crackdown
Bloomberg 1 hr ago
(Bloomberg)
Bitcoin resumed its selloff Friday after China reiterated a warning that it intends to crack down on cryptocurrency mining as part of an effort to control financial risks.
The largest digital currency fell 6.6% to $37,451 as of 12:41 p.m. in New York. The statement Friday after a meeting of the Financial Stability and Development Committee provided the latest blow in a rough week for the cryptocurrency market, rattled by forced selling and a possible U.S. tax clampdown.
China has long expressed displeasure with the anonymity provided by Bitcoin and other crypto tokens, and warned earlier in the week that financial institutions weren’t allowed to accept it for payment. The country is home to a large concentration of the world’s crypto miners who verify transactions and require massive amounts of commuting power, threatening the nation’s greenhouse gas emissions.