- Chaoyang District People’s Court recently rejected a lawsuit filed against a crypto company in the Chinese capital.
- Beijing Phonf Marketing Technology paid Zyzc Blockchain Technology 10 million yuan ($1.6 million) for mining hardware deployed in Sichuan by Zyzc Blockchain Technology in May 2019.
- Crypto mining was still tolerated by the central government, but some local authorities, including those in this province, allowed bitcoin farms to use excess hydropower.
A lawsuit filed against a crypto company in the Chinese capital by the Chaoyang District People’s Court was recently rejected. One of its clients filed it because he didn’t make money from his investments in bitcoin mining, the Hong Kong daily South China Morning Post reported, quoting state-run media. The plaintiff, Beijing Phonf Marketing Technology, paid Zyzc Blockchain Technology 10 million yuan ($1.6 million) for the deployment of mining hardware in Sichuan in May 2019.
During that time, the central government was still tolerant of crypto mining, but some local authorities, including those in this province, allowed bitcoin farms to utilize excess hydropower.
Crypto-related activities such as trading were banned in China back in 2017 but mining was not interfered with until this spring. Following President Xi Jinping’s pledge to achieve carbon neutrality within four decades, the State Council decided in May to clamp down on the industry. In recent months, the offensive has spread to provinces like Sichuan.
According to Beijing Phonf’s plea, it earned 18.35 BTC, worth around $904,000 at the time of writing, but less in previous periods. It also demanded that the company with which it worked pay it another 278.17 BTC as compensation. The court has ruled that mining contracts are invalid in the first case of its kind, according to the report. Chinese judicial system has no intention of recognizing or protecting cryptocurrencies, according to newspaper report.
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After the lawsuit was rejected, the Chaoyang District Court notified the provincial branch of the National Development and Reform Commission (NDRC) in Sichuan. Economic planners have taken steps to close down any remaining mining facilities involved in the case and have targeted other coin-minting projects.
Other countries have also conducted inspections to identify illegal mining activities. In Zhejiang, for example, authorities raided nearly two dozen government-run organizations, including universities, and discovered that 14 were mining cryptocurrencies.
Along with Sichuan and Zhejiang, a number of provinces have been affected by this year’s government crackdown on mining, including Xinjiang, Qinghai, Yunnan, Inner Mongolia, Anhui, and Hebei. The NDRC announced in November that it would take action against state-run enterprises that extract digital currencies.