Chinese state official admits to colluding with miners

Chinese Communist Party official Xiao Yi pleaded guilty to offering Bitcoin miners despite financial subsidies and a nationwide guarantee of electricity cryptocurrency Sanctions.

According to state-owned Chinese news agency Xinwen Lianbo, Yi accepted 125 million yuan in bribes related to projects and job postings and caused “huge damage to public property” through illegal agreements with bitcoin miners.

The Chinese government did nothing to stop the miners

according to report goodWhile serving as the secretary of Jiangxi’s Fuzhou municipal committee, Xi engaged in unethical abuse of power. Court has been adjourned and will reconvene for Yee’s sentencing at an undisclosed date.

Chinese government banned cryptocurrency mining activities in September 2021 as part of a continued push towards reaching carbon neutrality by 2060. The moratorium also affected other industries, including disposable plastic cutlery makers and coal miners.

Under the ban, miners could not legally access electricity or capital markets, effectively capping the Chinese hash rate overnight. Many miners migrated west to take advantage of cheap or flexible electricity systems in Texas and European regions such as Abkhazia.

But data from the Cambridge Center for Alternative Finance revealed a steady increase in mining activity, and as of January 2022, China accounted for more than one-fifth of the total hashrate.

chinese mining stock
source: Cambridge Center for Alternative Finance

While it is unclear how the miners accessed the compound and electricity, Yi’s case reveals loopholes in China’s enforcement that could have allowed miners to fly under the radar.

After the ban said a miner They changed the facilities where they mine to hide the high power consumption inherent in mining.

China Continues to Develop Anti-Crypto Infrastructure

While the Chinese government is against private cryptocurrencies, it has put substantial resources into testing its e-yuan CBDC. it Entered over 100 billion yuan ($13.9 billion) in transaction volume as on August 31, 2022.

Crypto enthusiasts have long criticized CBDCs as surveillance tools for authoritarian governments such as China and Turkey. The Turkish Central Bank recently announced that first transaction With Digital Lira. It will also bundle digital identity into its CBDC, which some believe Might be a step towards Big Brother state.

China Daily on December 27, 2022 Reported Launch of a state-backed, non-crypto digital collectibles marketplace called the “China Digital Assets Trading Platform”. The marketplace was launched in partnership with China Technology Exchange, China Cultural Relics Exchange Center and Huaban Digital Copyright Service Center Co., Ltd.

The marketplace will “promote sharing the achievements of Chinese cultural digitization.”

The new platform will run on a state-sanctioned blockchain called the “China Cultural Protection Chain”. The network is reportedly considered “the only trusted depository insurance platform for tradable digital assets”.

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