Bitmain is the largest hardware manufacturer for crypto asset mining, and it is planning to eradicate the sale of its equipment in the mainland of China, according to the reports. This is the result of an enormous amount of pressure put in by the government of China in order to stop crypto mining in the country because the Chinese government believes that it is increasing their carbon footprint, so it should be illegal in the country to mine crypto assets.
Even though the company has not yet released a statement which suggests that they are suspending their sales in the Peoples Republic of China, some sources who are very close to the matter have suggested that the company is looking for alternate geographical areas where the laws regarding the crypto asset mining are more lenient. Two of these sources are the ones who are involved in the procurement process of this equipment for the leading mining pools, and the third source is working with the Chinese miners.
This change will allow Bitmain to continue its production and manufacturing process. Although the cost of relocation can be a great setback for them monetarily, it is better than dissolving the company altogether.
The sources have also disclosed that the company is planning to relocate a major section of their production department away from the region of Shenzhen, but they still don’t know where exactly will they be relocating this department to.
Market Reaction After Chinese Crackdown
Last week, the central bank of China announced a ban on every kind of crypto asset transaction and mining, using the term ‘illegal’ for any activity related to digital assets, and this is what triggered Bitmain’s decision to relocate.
Another consequence of this announcement was a market crash when traders and investors cashed out over 100 billion just a few minutes after the announcement. Alibaba has also announced that they will not be dealing with Bitmain to sell their equipment from now on.
After the first crackdown by China in mid-2021, most of the miners left the country, although the country had a major amount of crypto-asset miners. This move now by Bitmain is very significant as it will also pave the way for many other crypto mining equipment manufacturers to explore new markets that have crypto-friendly laws. There are over 15 firms related to crypto that are suspending their operations in China.