Alibaba Will Stop Selling Crypto Mining Hardware
Alibaba, one of China's leading e-commerce platforms, recently announced that it would be cutting ties with the crypto market. This move is in response to China's mining crackdown that started earlier this year. The crackdown has forced a lot of mining companies to depart from the country.
It has also led to many Chinese companies separating themselves from the mining industry. For instance, Alibaba announced that it would be closing two of its mining-related sales categories on its platform.
During the announcement, the Chinese e-commerce giant cited the recent declarations by the Central Bank of China and other supervision establishments as the primary reason for this decision.
The company also announced that the decision was prompted by the instability of the laws and regulations on cryptocurrencies and other relevant products in China and other international markets.
China's Crackdown on Mining and the Ban on Cryptocurrencies
The crackdown on mining in China started earlier this year. On the 24th of September, the Central Bank of China, alongside ten other government bodies, declared that all cryptocurrency-related transactions are illegal. The Chinese Central Bank also announced a ban on the provision of services to Chinese residents from overseas exchanges.
The statement also declared that cryptocurrencies like Bitcoin and Ether are illegal and cannot be used in the Chinese market as a currency. Following the Central Bank's announcement, the cryptocurrency market in China fell slightly.
This announcement did not surprise many because China has banned cryptocurrencies several times in the past. For instance, over the years, China has been instituting restrictive laws and regulations on cryptocurrencies.
Previously, the country announced that it was illegal for corporations to provide cryptocurrency-related services or run cryptocurrency exchanges within the state. However, this time, there is no ambiguity in the decision. The new regulation is essentially a blanket ban on all activities that could promote the functioning of the cryptocurrency ecosystem in China. The country has left no room for discussion and has been very clear with its decision.
The new regulations do not only affect crypto companies within the country. They have made it so that even companies outside the country will not serve people living in mainland China. The National Development and Reform Commission of China also declared that they would be going after cryptocurrency mining operations by cutting off their power.
It is worth mentioning that these operations require large quantities of electricity to perform complex mathematical puzzles for which they are rewarded with digital currency units. The commission also started targeting individuals who pretend to be data researchers to hide their crypto-related energy-intensive activities.
It is also worth mentioning that China has been a popular site for crypto mining equipment because of its low electricity costs in various areas. In 2019, China was declared home to more than seventy-five per cent of the world's Bitcoin energy consumption.
However, the country is currently experiencing an energy crisis and is looking to become carbon neutral in the next three decades. However, due to the crypto mining equipment, the crypto market is making this hard for the country to achieve. This is why institutions like the National Development and Reform Commission cut off the electricity supply for crypto mining equipment and operations.
The crackdown on crypto mining equipment and the overall cryptocurrency industry in China has been so intense that many companies in the crypto-industry have migrated from China. A lot of companies in this industry have stopped their operations in Mainland China. For instance, Sparkpool, a leading Ethereum mining pool company based in Hangzhou, recently announced a total shutdown of its operations and services in China.
Other major crypto exchange platforms like Binance and Hubi also cut ties with mainland China by halting their operations in the region. For example, Binance and Huobi stopped registering new clients from mainland China.
More than thirteen institutions offering crypto-trading services have announced their plans to cut ties with customers in Mainland China following the Central Bank of China directive. On the other hand, companies that seek to continue operating in China lawfully have opted to get out of the business. This is enough proof that the lockout on crypto-mining in China is speeding up.
The government of China explained that the cryptocurrency market and technology are a threat to citizens' assets and a tool for encouraging criminal activities such as money laundering. According to slate.com, another reason why the Chinese government is going so hard on the crypto market is its desire to exert more control over the economic activities in the country.
This can only be achieved by doing away with cryptocurrencies since they are designed to facilitate transactions without institutional authorities like banks and governments. This takes some power away from the state actors, and China is not taking this lying down.
Alibaba's decision to stop sales and remove Alibaba crypto mining equipment
The Chinese e-commerce giant will be closing down two crypto mining equipment categories under its consumer electronics section. This Alibaba crypto mining equipment is the Blockchain Miner Accessories and Blockchain Miners Categories.
These two categories are used to help consumers in China and beyond min for various forms of cryptocurrencies. They were also aimed at selling clients with crypto-mining equipment. The move to close them down comes uncontested by its stakeholders because of the strict laws and the active crackdown on such operations in China.
In addition to this, the e-commerce stronghold will also ban and stop sales of any tutorials, strategies, and software used for obtaining cryptocurrencies on its platform. In the statement, the Chinese e-commerce giant also announced that there would be consequences for any merchants who violate the new policies.
For instance, any merchants who go against the new policies risk their products being deleted from the e-commerce platforms or their accounts being completely shut down. However, these consequences will start being served from the 15th of October. In their announcement, the Chinese e-commerce giant also stated that they would be keeping track of policy changes in various companies and adjust their control policies as required.
The move will also apply to online shopping platforms like Taobao and the used goods platform called Xianyu, among other platforms that Alibaba operates. It is worth mentioning that several top regulators signed the Announcement by Alibaba in China.
This seems to be a wise move by Alibaba because different governmental bodies in China are set on eliminating the crypto market in China. Therefore, any company still associated with this industry would end up in the line of fire.
Alibaba banning crypto equipment issue in a nutshell
The Chinese e-commerce giant is set to stop the sales of crypto mining equipment, and this comes after the government ban on these currencies. Merchants who attempt to trade crypto mining equipment will face severe consequences, as well as those who use cryptocurrencies to buy and sell goods and services.
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