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China Shuts Down Over 90% BTC Capacity, Sichuan BTC Sites Massively Offline

China intensified law enforcement against domestic Bitcoin mining activities. Bitcoin mining sites in Sichuan Province were reportedly massively disconnected and lost their abilities for further mining operations, according to local media’s coverages.

The disconnection was reportedly occurred since Sunday, citing local media’s coverages. Some firms even closed their facilities prior to the outage.

According to Global Times, The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice last Friday. Local authorities requested a total halt to Bitcoin mining activities, ordering local electricity companies to “scree, clean up as well as terminate” mining operations, without any further electricity supply provision on Sunday, followed by conducting self-inspection to report their results by this Friday. 26 firms are listed and alleged as crypto mining entities. The authority forced them to close, including Heishui Kedi Big Data Tech Co and Kangding Guorong Tech Co.

Over 90% BTC Mining Capacity Lost

The ban means more than 90% of China’s Bitcoin mining capacity is estimated to be shut down, at least for the short run, the paper said. Local netizens described this incident as a collective “mining accident” or even “the end of an era”.

In southwestern China, Sichuan province is counted as the biggest Bitcoin mining hub in China or worldwide. Unlike thermal power generated in Inner Mongolia and Xijiang province, BTC mining activities in Sichuan mainly are generated by hydropower, which is more environmentally friendly and sustainable, according to local data.

Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger expressed his disappointment with the latest crackdown.

“We had hoped that Sichuan would be an exception during the clampdown as there is an electricity glut there in the rainy season. But Chinese regulators are now taking a uniform approach, which would overhaul and rein in the booming Bitcoin mining industry in China.”

Some analysts believe China’s latest move is intended to tighten regulatory scrutiny of digital currency trading and prevent systematic financial risk and prohibit money laundering such as these illegal activities. In addition, the market believes that China aims to promote its digital currency (e-CNY) against cryptocurrencies in the long term.

Meanwhile, Bitcoin price was trading down to $34,988 during the intraday, hit the low of $33,429 in the past 24 hours. According to Bloomberg’s coverage, some analysts pointed out that the hashrate in China dropped significantly, encountering the death-cross, i.e. the 50-day moving average drops below the 200-day moving average.

Ulrik K.Lykke, Executive Director at Crypto/Digital Assets Fund ARK36, told the Blockchain.News that this is not the first time Chinese policies have administered a shock to the markets and will unlikely be the last.

“The development that seems to exert the most influence on the bitcoin price lately is the Chinese government’s crackdown on bitcoin mining, which has already resulted in a 30%-drop in the hashrate on the Bitcoin network.

Nevertheless, Antony Portno, the founder of TradersOfCrypto, commented:

“The dropping hashrate, could be seen as an opportunity for Bitcoin to change what it is doing and become more eco-friendly, previously bans on mining were viewed negatively but this should be seen as an opportunity for more diversified mining.”

Portno suggests the loss of thousands of bitcoin mining farms means Bitcoin will be less competitive as the network is smaller in the short term. However, he believes mining will continue in China as the ban will focus on larger farms. The consequences on Bitcoin still need other indicators with the market sentiment and further observation.

Similar harsh ban actions in others key mining hubs in northern regions also took place recently. In addition, some areas in north-western China also have blackout due to natural disaster of flooding, affecting the hashrate of mining pools.

Lykke believes negative factors are causing a negative market reaction in the short term. However, that could be net-positive in the long term. As miners spread to other locations, they will likely choose places with secure access to cheap energy sources.

As a result, the hashrate will start recovering, and the network will become even more stable. Additionally, mining will become more decentralized and, likely, more based on clean, renewable energy sources.

Bittrex to Shut Down U.S. Platform

Cryptocurrency exchange Bittrex will close its U.S. platform on April 30, according to an announcement from the company on Friday. After nine years of operation, Bittrex co-founder and CEO Ritchie Lai stated that the current U.S. regulatory and economic environment made it “economically unviable” for the exchange to continue operating in the country.

Lai cited unclear regulatory requirements that are enforced without appropriate discussion or input, resulting in an uneven competitive landscape as the reasons behind the closure. He added that operating in the U.S. was no longer feasible for Bittrex.

Despite the shutdown of its U.S. platform, Lai assured customers that all their funds are safe and available for withdrawal. The closure will not affect Bittrex Global, which operates in Europe, Canada, and South America, among other locales, and will remain open for trading.

Bittrex’s decision to shut down its U.S. platform is not the first time a crypto exchange has faced regulatory hurdles. In recent weeks and months, U.S. regulators have increased their oversight of crypto-related companies. Coinbase recently disclosed receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC), while Kraken paid a $30 million fine in a settlement with the same agency after shuttering its crypto staking service.

Binance and its CEO and founder Changpeng Zhao were also recently named in a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC). The complaint alleges the offering of unregistered crypto derivatives products in the U.S.

The crypto industry has been grappling with regulatory challenges in the U.S., with some companies choosing to exit the market altogether. However, other companies, like Bittrex Global, continue to operate and expand their reach in other parts of the world.

Bittrex Global operates in over 100 countries and recently launched a new platform for institutional investors. The exchange’s closure of its U.S. platform may be a strategic decision to focus on expanding its operations elsewhere.

The crypto industry is still in its early stages, and regulatory challenges are expected to persist. The industry’s stakeholders will need to work with regulators to find a balance between innovation and compliance to ensure the healthy growth of the industry.

Nigerian Crypto Startup Lazerpay to Shut Down Operations

Lazerpay, a Nigerian start-up that was established in October 2021 by Emmanuel Njoku, Abdulfatai Suleiman, and Prosper Ubi, has decided to discontinue operations since it is unable to get sufficient finance. Njoku announced the news on April 13 through a message that he posted on Twitter. In the statement, he expressed his thanks for the relationships that were created and the influence that Lazerpay had on the cryptocurrency ecosystem. He went on to highlight that the new company had worked very hard to keep the lights on, but unfortunately, they had reached a point where they needed to close its doors.

This announcement comes only a few short months after Lazerpay announced layoffs in November 2022. Those layoffs were also ascribed to the startup’s failure to secure money after the withdrawal of a main investor. According to Njoku, despite the obstacle, Lazerpay has already onboarded more than 3,000 firms and handled more than one million dollars in transactions.

Lazerpay has urged that merchants take their cash from the platform before the deadline of April 30, 2023, utilizing the bank or cryptocurrency payment options. This will enable a smooth transition for Lazerpay’s customers. The company has declared that it will refocus its efforts on fixing any unresolved concerns. In addition, the company is in the process of soliciting proposals from other businesses interested in purchasing its intellectual property.

Lazerpay was developed to encourage widespread use of cryptocurrencies and to assist companies in accepting stablecoin payments from clients located all over the globe. The failure of the venture to get sufficient finance ultimately resulted in the company’s demise, which represents a big loss for the African cryptocurrency market.

The closure of Lazerpay is the most recent event in a string of disruptions that have occurred in the African cryptocurrency market. Paxful, a peer-to-peer marketplace for Bitcoin transactions, also announced last week that it would be closing its doors. Notwithstanding this, a few crypto payment firms on the continent, such as NairaEx, which is a functioning Bitcoin exchange in Nigeria, are nevertheless doing rather well.

Despite the fact that Lazerpay has shut down, Njoku and the other co-founders of the company continue to have a positive outlook on the future of cryptocurrencies in Nigeria and Africa. They have expressed their conviction that the African continent has a significant amount of untapped potential for innovation and development in the cryptocurrency industry.