Chinese Authorities Investigate Illegal Bitcoin Mining Farms at Hydro Plants

Sichuan authorities are reportedly investigating the Bitcoin mining sites that have purportedly been built without official approval.

On Thursday, a state-owned publication in Sichuan published a front-page article reporting that the land-resource bureau in Garze has discovered illegal Bitcoin mining farms constructed at the sites of hydropower stations.

Per the article, the Economic and Information Bureau has created a committee with other agencies to investigate the illegal construction issue.

“We are still investigating on the issue and can’t disclose more details on the overall situation,” an official from the bureau stated.

The problem is that crypto mining facilities were found being constructed at hydropower plants along the Dadu river to exploit the area’s low-cost electricity without obtaining authorization beforehand.

The report identified a mining farm inside the premises of a hydropower plant named Ginkang station. It can host 50,000 units of mining equipment, 60% of which already operates.

“If [a bitcoin mining farm] is built within the authorized area of a power station for electricity consumption, we need to verify if their usage is legal. If it’s outside the authorized area, then it needs to be dealt with as the construction was not approved,” a local land resource bureau official detailed in the report.

A CoinShares report published in November states that almost half of the global Bitcoin network’s hash rate came from Sichuan-based facilities. The network’s overall hash rate has recently spiked to almost 58,000 petahashes per second.

The Economic and Information Bureau official added that Garze county prohibits Bitcoin mining projects.

“We don’t allow outside investment in the area to be involved in bitcoin. Even for big data projects, we will conduct an investigation into the nature of the data involved before making a decision,” they stated.