A group in Beijing, the China Blockchain Application Research Center, was recently banned by the Civil Affairs Bureau of Beijing. The founder is Star Xu, the founder of OKex, and participants of the project include Lilin, the founder of Huobi, along with other crypto figureheads in China.
The China Blockchain Application Research Center claims the institute is a private, non-profit, and non-governmental organization that doesn’t take positions on policy matters.
China’s Targeted Crackdown of Crypto Activities
The organization, along with other blockchain-focused companies, opened the first blockchain facility in Beijing in December 2015. It is backed by the Beijing Municipal Finance Bureau.
The Beijing Civil Affairs Bureau recently banned an organization called China Blockchain Application Research Center. The founder is OKEx founder Star Xu, and its members include Huobi founder Lilin, Bibox founder and many giant whales of Chinese cryptocurrency.
— Wu Blockchain (@WuBlockchain) July 8, 2021
This example shows how government offices in China are continuing to investigate blockchain-related organizations.
The China Blockchain Application Research Center remained unregistered for six years after it was established, possibly making it a target of the government.
Along with the targeted crackdown of offline organizations, crypto-related online communities were thrown into chaos due to the government’s recent actions.
China’s Recent Crackdown on Crypto
The use of cryptocurrency in money laundering, smuggling, and drug trafficking is why Chinese financial regulators have classified digital currency trading as unlawful since the beginning of 2019. However, it is estimated that over 75% of the world’s Bitcoin mining took place in China. So, China is increasing pressure on investors inside its borders using cryptocurrencies.
Inner Mongolia, a coal-rich region renowned for inexpensive electricity, is a key mining center for bitcoin. They promised to get rid of all mining projects by the end of February.
Following a recent announcement by the People’s Bank of China, Chinese financial institutions and banks are no longer permitted to provide a wide variety of cryptocurrency services, including account opening, transactions, and settlements.
Five banks, including Alipay, were reportedly questioned by the Central Bank, which requested that they not engage in crypto-related activities.
Additionally, there are many additional Chinese banks which include the Agricultural Bank of China, the China Construction Bank, the Postal Savings Bank of China, and the Industrial Bank that have stopped engaging in crypto-related activities.
On the other hand, China’s activities may be a net positive for overseas crypto enthusiasts. Due to China’s severe restriction on the country’s crypto activities, the pool of miners vying to produce tokens has become smaller, and therefore mining is now simpler and more lucrative.
The total difficulty of mining bitcoin fell on Saturday by 28%, the biggest decrease in the history of the Bitcoin network, according to statistics from BTC.com.
My daily #Bitcoin mining revenue jumped about 50% yesterday after the difficulty adjustment.
— The Wolf Of All Streets (@scottmelker) July 5, 2021
When it comes to hash rate, the network automatically adjusts it every two weeks to make sure that miner productivity is evenly distributed. The recalibration that took place on Saturday cut the mining system’s difficulty by nearly 30%, which means that the money for mining is likely to continue flowing to the miners who are still online.