Bitcoin Miners Are Shifting Outside China Amid Clampdown

(Bloomberg) -- As China's crackdown on cryptocurrencies broadens to bitcoin miners, some of the industry's biggest players are shifting operations overseas.

Bitmain, which runs China's two largest bitcoin-mining collectives, is setting up regional headquarters in Singapore and now has mining operations in the U.S. and Canada, Wu Jihan, the company's co-founder, said in an interview. BTC.Top, the third-biggest mining pool, is opening a facility in Canada and ViaBTC, ranked No. 4, has operations in Iceland and America, their founders said.

The moves underscore how China's once-dominant role in the world of cryptocurrencies is shrinking as policy makers clamp down.

After banning initial coin offerings and calling on local exchanges to halt virtual currency trading last year, Chinese authorities outlined proposals this week to discourage bitcoin mining -- the computing process that makes transactions with the cryptocurrency possible. Officials plan to limit the industry's power use and have asked local governments to guide miners toward an “orderly” exit from the business, people familiar with the matter said.

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While the moves are unlikely to have a noticeable effect on bitcoin transaction speeds, they could reshape the cryptocurrency mining industry. Miners have until recently flocked to China because of the country's inexpensive electricity, local chipmaking factories and cheap labor. They now have little choice but to look elsewhere.

“We chose Canada because of the relatively cheap cost, and the stability of the country and policies,” Jiang Zhuoer, founder of BTC.Top, said in an interview. He also considered locations in Iran and Russia.

Bloomberg News reported the Chinese government's planned curbs on Wednesday. The People's Bank of China didn't respond to faxed requests for comment.

Bitcoin, which surged 15-fold last year, climbed about 6 percent at 5:32 a.m. New York time.

To contact Bloomberg News staff for this story: Steven Yang in Beijing at kyang74@bloomberg.net.

To contact the editors responsible for this story: Jessica Zhou at jzhou75@bloomberg.net, Michael Patterson, Sam Mamudi

©2018 Bloomberg L.P.

With assistance from Steven Yang