Chinese Authorities Investigating Illegal Bitcoin Mining At the Sichuan Hydro Plants

China has been one of the most-preferred destinations for cryptocurrency miners due to availability of abundant and cheap hydroelectric power. However, the Chinese government has been implementing a heavy crackdown on all local miners in a bid to prevent all sort of crypto-related activities.

Government authorities from China’s Sichuan province are reportedly investigating the construction of Bitcoin mining farms that have been constructed without the official permission. Last Thursday, May 30, Sichuan’s local news publication reported that the the land-resource bureau in Sichuan’s Garze county has found some illegally constructed Bitcoin mining farms besides the hydropower stations with no official approval from the authorities.

The article also notes that Sichuan’s Economic and Information Bureau has formed a committee with third-party agencies to investigate further into this matter. “We are still investigating on the issue and can’t disclose more details on the overall situation,” an official said.

The authorities have found that Bitcoin mining farms were constructed at the hydropower stations near the Dadu river in Sichuan’s northwestern region to leverage the cheap electricity available in the area. However, they didn’t obtain the authorization for its construction beforehand.

An official was quoted saying: “If [a bitcoin mining farm] is built within the authorized area of a power station for electricity consumption, we need to verify if their usage is legal. If it’s outside the authorized area, then it needs to be dealt with as the construction was not approved”.

Moreover, the article cites a Bitcoin mining facility dubbed as Ginkang station having a capacity to host over 50,000 units of Bitcoin mining equipments.

As the summer rainy season comes near, miners from across the China move into the Sichuan province in the Garze and Aba counties looking to boost their ROI from the availability of cheap hydroelectric power.

However, an official from the  Economic and Information Bureau stated that the Garze county doesn’t allow outside investments in Bitcoin or any crypto mining projects. He said: “We don’t allow outside investment in the area to be involved in bitcoin. Even for big data projects, we will conduct an investigation into the nature of the data involved before making a decision.”