(Reuters) – SHANGHAI (Reuters) – Cryptocurrency mining companies like as Huobi Mall and BTC.TOP have shut down their operations in China as Beijing intensified its crackdown on bitcoin mining and trade, sending the digital currency crashing.
The crackdown was announced late Friday by a State Council committee led by Vice Premier Liu He, marking the first time the council has targeted virtual currency mining, a large business in China that accounts for up to 70% of the world’s crypto supply.
Bitcoin has taken a beating as a result of China’s new decision, and is now down over 50% from its all-time high. The stock dropped as much as 17% on Sunday before recouping some of its losses and closing flat in Asia.
All of Huobi Mall’s custodial businesses have been suspended, according to a statement released late Sunday by the cryptocurrency exchange Huobi.
“In the meantime, we’re contacting international service providers to pave the road for future mining rig exports,” Huobi Mall stated in a Telegram message to clients, urging them to “not worry and calm down.”
BTC.TOP, a cryptocurrency mining pool, has also suspended its operations in China, citing regulatory concerns.
Founder Jiang Zhuoer stated on Weibo that BTC.TOP will primarily undertake crypto mining business in North America in the future.
“As Chinese regulators crack down on mining at home, practically all Chinese crypto mining equipment will be exported overseas in the long run,” he stated.
After banning bitcoin exchanges in 2017, China has already lost its position as a global cryptocurrency trading centre.
“China will eventually lose crypto computing capacity to international markets as well,” Jiang predicted, forecasting the rise of mining pools in the United States and Europe.
Crypto miners validate virtual coin transactions with more powerful, specially designed computer equipment, or rigs, in a process that generates newly minted crypto currencies like bitcoin.
HashCow, another cryptocurrency miner that has ten mining facilities in China’s Xinjiang and Sichuan regions and sells computing power to investors, has stated that it will abide by all government restrictions.
HashCow announced in a message to clients that it will stop selling new bitcoin mining rigs and will refund all investors who had placed orders for computing power but had not yet begun mining.
(Samuel Shen and Andrew Galbraith contributed reporting; Shri Navaratnam edited the piece.)