China’s Zhejiang province has shut down hundreds of state-owned enterprises that were mining cryptocurrency.

December 15, 2021 - Around 2 mins mins to read

According to a Tuesday article posted on the website of China‘s Central Commission for Discipline Inspection (CCDI), the country’s anti-corruption watchdog, an internet authority in East China’s Zhejiang province identified in July 4,699 IP addresses in the province that were involved with cryptocurrency mining, and among them 183 addresses were related to 78 state-owned entities.

Authorities in Zhejiang created four joint examination teams in September to raid 20 state-owned organizations with 36 IP addresses at random, and on-site inspections revealed that 14 of the entities were taking the initiative to mine cryptocurrency.

According to the CCDI report, the Zhejiang inspections also discovered that 34 state-owned organizations took the initiative to mine cryptocurrency, while 32 entities were compelled to mine because their computers or internet devices were infected with Trojans.

Following that, the local authorities shut down 68 mining machines that were mining 12 different cryptocurrencies, including Bitcoin and Ether, and penalized 48 people — 21 of whom worked at state-owned entities or Communist Party agencies — who were found to have mined cryptocurrency using public resources.

Zhejiang is not the only province that has prosecuted state-owned enterprises for crypto mining. Jiangsu province’s communication watchdog detected 4,502 IP addresses engaged in crypto mining in the province in early October, with 21% of them coming from state-owned entities.

At a news conference in November, Wei Meng, a spokeswoman for the National Development and Reform Commission, the country’s top economic organizer, said the authorities will focus on targeting industrial clustered mining operations and those carried out by state-owned businesses. If the authorities discover an entity that has participated in cryptocurrency mining, it may face punitive electricity costs in the future. Meanwhile, South China’s Hainan province has revealed a proposal to raise power costs for people who engaged in cryptocurrency mining in December.

Since early this year, China has been vigorously cracking down on cryptocurrency mining. On September 24, the NDRC, in collaboration with ten other authorities, issued a notice aimed at eradicating crypto mining across the country.

Nonetheless, some miners appeared to have quietly continued to operate in China. In November, a Chinese cybersecurity firm, Qihoo 360, reported detecting an average of 109,000 active crypto mining IP addresses every day.

Patrick

Coincu News