More than 170 criminal groups involved in the use of cryptocurrencies for money laundering arrested in China
According to Chinese business agency Jiemian News, 20 provinces in China have set electricity consumption limits for industrial enterprises and residential buildings.
In Jiangsu province, 143 enterprises are completely shut down, more than a thousand enterprises are forced to work according to the “two in two” scheme. In Guangdong province, individual enterprises have moved to a two-in-five operation. The authorities ordered them to keep their electricity consumption 15% below the full load level. In Zhejian province, about 160 companies and factories have been closed, in Liaoning province, electricity is cut off in 14 cities.
Record high prices for gas and coal and stringent environmental requirements of the PRC government are cited as the reasons for the imposition of restrictions on electricity consumption. On October 4, the gas price in Europe for the first time exceeded $ 1200 per 1,000 cubic meters. Coal quotations skyrocketed after gas, reaching a record high in Europe since 2008.
The Chinese authorities have the opportunity to increase electricity generation by increasing coal generation, which provides about 70% of the country’s total electricity, but now Beijing is not going to do this. The desire of the Chinese authorities to improve the ecological situation in the country before the Winter Olympics is noted.
Photo: REUTERS / Tyrone Sioux
In the future, however, China does not at all plan to abandon coal generation, but, on the contrary, intends to increase it. In 2020 alone, China itself built three times more coal-fired power plants than the rest of the world – 38.4 GW of new capacity (in the rest of the countries 11.9 GW). The country plans to build another 300 such facilities. Moreover, China is increasing its own coal production. In 2021, production resumed at previously closed coal mines in the north of the country. Due to them, it is planned to increase coal production by 110 million tons. In 2020, it amounted to 3.84 billion tons.
Beijing’s electricity rationing procedure is likely to be a tool for short-term CO emissions reduction2 into the atmosphere (during the preparation and holding of the Olympics), but the government faced soaring prices for most energy resources.
The situation in the Chinese energy sector resembles the collapse of the Chinese stock market in June 2015 caused by Western financial institutions. Chinese leadership blamed a bank holding for him Morgan Stanleywho manipulated prices in the commodity market. The Chinese authorities emerged from the 2015 financial crisis by sharply limiting the ability of foreign speculators to undermine the country’s stock market.
If you look closely, the current energy crisis in China is proceeding along the same lines. By taking energy-saving measures amid a sharp jump in coal prices, the Chinese authorities have declared war on the cryptocurrency tycoons and are driving them out of the country. The fight against bitcoin makers has been going on since last year. According to the Center for Alternative Finance at the University of Cambridge, in April 2020, China accounted for 65 percent of the world’s total bitcoin computing power (hashrate).
Chinese mining is concentrated in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan, and Yunnan. In these provinces, the consumption of electricity for cryptocurrency mining has reached almost 10% of the total energy consumption of these regions. In fact, all the new energy capacities introduced were devoured by the Bitcoin mafia.
In June 2020, the Yunnan Provincial Government ordered to close 64 unauthorized cryptocurrency mining enterprises. Tax evasion and security risks were cited as grounds for closure, including those related to unauthorized connections to local hydroelectric power plants. Miners simply stole electricity.
In May, an all-out attack on Chinese cryptocurrencies began. Initially, the People’s Bank of China, the National Internet Finance Association, the Banking Association of China and the Payment and Clearing Association made ominous statements “about the need to prevent the risk of hype in transactions with virtual currency”. Then, the Financial Committee of the State Council of the People’s Republic of China banned the purchase of cryptocurrencies, any related investment activities and the exchange of cryptocurrencies. At the end of June, the People’s Bank of China banned cryptocurrency mining.
After that, the cryptocurrency business went offshore, and many miners began to leave China. In cryptocurrency circles, they started talking about the “great migration of mining”. The most popular countries they went to were the USA, Canada and Kazakhstan.
Alejandro De La Torre, Vice President of the Mining Pool Poolin headquartered in Hong Kong, told the TV channel CNBC: “We don’t want to face a new ban in China every year … and that’s why we are moving to the US and Canada.”…
In early June 2021, the Chinese police, as part of a nationwide anti-money laundering campaign, dubbed Hacking an operation card, has arrested over a thousand people suspected of using cryptocurrency to launder fraudulent proceeds. More than 170 criminal groups involved in the use of cryptocurrencies for money laundering have been detained, according to the Chinese Ministry of Public Security.
According to the ministry’s official statement, the criminals charged their clients a commission of 1.5 to 5% for converting illicit proceeds into cryptocurrency through crypto exchanges. The Chinese Payments and Clearing Association claims that nearly 13% of gambling sites support the use of cryptocurrencies, and the blockchain technology used by virtual money makes it difficult for authorities to track the movement of money.
In September 2021, the authorities drew attention to miners disguised as “data scientists” and data center operators. In September, the number of inspections of colleges, research institutes and data centers for illegal mining activity rose sharply.
“The guys from the Chinese MGB connect to the pools of miners, look at the hash rate, then pull the switch down and, if the pool has lost its capacity, they run to inspect facilities in the de-energized region,” – Russian writes from Hong Kong THIS IS-expert Ruslan Karmanov.
On September 24, the People’s Bank of China published a clarification on its website: all cryptocurrencies are not fiat money and any transactions with them are illegal. Cryptocurrency-related transactions, including services provided by offshore exchanges to local residents, are illegal financial activities, the NBK said in a statement. As a result of the quotation Bitcoin, Ethereum and other cryptocurrencies fell sharply.
Actually, there is no energy crisis as such in China. There are planned power outages, which, as noted by the Russian expert Vladimir Pavlenko, occur in a checkerboard pattern, that is, in full accordance with the government’s plans.
Equally meaningful are the actions of the Chinese authorities in relation to the distressed residential real estate operator Evegrande… The bad debts of this company, too carried away by speculation in the real estate market, exceed $ 300 billion. However, the PRC real estate sector is huge. According to Goldman Sachs Group Inc., the total market value in 2019 was $ 52 trillion, more than double the size of the residential housing market in the United States, according to Wall Street Magazine… Even if speculators from Evegrande disaster and ruin, the Chinese economy “will not notice the loss of a soldier.” There will be no disaster. The PRC government decided to partially nationalize the company and subject it to restructuring… “Chinese President Xi Jinping is trying to temper the country’s obsession with property and said that” housing is for living, not for speculation, “ – writes Nikkei Asia…
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