Cryptocurrency crackdown shifts to N. America, Asia

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SHANGHAI/HONG KONG- A crackdown by Beijing is rapidly accelerating a shift in focus by makers of machines that ‘mine’ cryptocurrencies like bitcoin from China to North America and Central Asia as Chinese clients face an uncertain future.

China’s central government vowed to clamp down on bitcoin mining and trading on Friday, causing some miners to halt all or part of their operations in a country that accounts for more than half of the world’s crypto supply.

The makers of the equipment miners use, many of them Chinese, say they are now looking elsewhere for growth.

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Hangzhou-based Ebang International said that its “mining machines will still be in short supply” overseas, even if domestic sales disappear.

The impact will be further softened by the fact that “domestic customers will go overseas to mine”, it added in a statement sent to Reuters.

Illustrating the trend, Shenzhen-headquartered BIT Mining Ltd said in a statement on Monday that it had entered into a deal with a Kazakhstan-based company to jointly invest in a crypto mining data center in the central Asian country.

Bitcoin miners use increasingly powerful, specially-designed computer equipment, known as “rigs”, to verify bitcoin transactions in a process which produces newly minted bitcoins.

The energy-hungry business is big in China, although the country’s market share had been declining for years due to regulatory uncertainty.

If China quickly loses its crypto computing power, foreign miners will benefit, Alex Ao, vice president of Innosilicon Technology, a chip-designer and crypto mining rig maker, said.

“Places like North America and Central Asia have advantages in terms of power supply and policy support,” Ao said, adding that more Chinese miners will shift abroad. – Reuters

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