Posted 1 year ago | by @devadmin

Despite the Chinese government’s effort to promote the development of blockchain technology, the government has frozen crypto miner’s credit cards according to a report.

While cryptocurrency ownership over the years has become challenged in China, the country still somehow became the world’s largest mining farms. In many cases, this is due to the fact that in China electricity is cheaper.

However, it seems that the mining industry is now facing financial censorship as the latest reports coming out of China indicates that the Chinese Communist Party (CCP) has begun targeting miner businesses since at least earlier this year.

Weixin has reported that numerous cryptocurrency miners across  China have had their cards frozen since June with cases piling up in the last week. The report entirely written in Chinese roughly translates as follows.

As a result of crypto miners cards being frozen their access to their bank accounts and their funds have been completely seized. The miners have reported they are experiencing numerous problems. China accounts for 65% of the global Bitcoin hash rate, reported earlier this year in May.

According to the Chinese local media, the crackdown is allegedly part of a campaign to combat telecom fraud and other types of money laundering.

Cryptocurrency miners are heavily dependable on fiat currencies and are one of the biggest providers of liquidity in the crypto industry having to sell Bitcoin to pay their electricity bills.

One such large mining farm in China, who requested to stay anonymous, told Weixin that one of the biggest headaches for everyone, and by far the most challenging task to do now is paying for their electricity bills. The source’s statement is on par with the overall thoughts in the industry—according to an anonymous online survey, 74% of miners stated that the card freezing had the biggest impact on their ability to cover the cost of electricity.

Zhao Dong and Xu Mingxing, the two leading figures in the circle, were also reported to be under investigation for suspected money laundering cases. One case happened in early as June when a miner’s card was frozen in Dongguan, a large number of miners were recruited. The core reason was that miners entered the industry early and most of them had familiar OTC channels. It is rumored that the Dongguan incident was caused by an OTC dealer and then spread to the surrounding area. Therefore, it may involve some OTC specializing in the business of miners, the report said.

It remains unknown when China began freezing cards, however, some sources explained to Weixin that there are a notable number of miners that have been unable to cash out for at least a month. In addition to having their credit cards frozen and the access to their bank accounts revoked, the miners further saw many Over The Counter services that specialize in assisting miners have also terminated their businesses..

Sun Xiao, an OTC merchant, told Weixin that this is the first time he saw both banks and OTC providers cut off mining companies at the same time. Xiao cautioned miners to be aware of QQ, WeChat, and Telegram groups offering them a chance to cash out anonymously through USDT. Suggesting that scammers are rife to prey on unsuspecting miners or the authorities could be watching.

Xiao further said that those short on funds should try to find a reliable counterparty to exchange cryptocurrencies for fiat, but advised them they should always keep records of all of the deals made in case they get audited by the government. All miners who have seen access to their funds revoked should get in touch with their banks and the authorities that were tasked with freezing the accounts to determine the reason and work with the government, Xiao expressed.

Bitcoin’s hash rate at the time of this report is 130.55 million and it’s currently climbing back up, that could change real quick, caution is advised. Thus far the news hasn’t affected Bitcoin or the crypto markets, as they remain unphased by the news. However, this author hasn’t seen the news reported elsewhere yet.

Bitcoin is currently trading at {FIAT: $18,277.18] UP +3.1% in the last 24 hours according to Coingecko at the time of this report.