Study: Publicly Listed Chinese Firms Quietly Participate in Bitcoin Mining

According to regional reports, a few publicly listed Chinese companies have been secretly mining bitcoin by pretending to provide cloud or web hosting services. Moreover, recent studies have revealed a growing trend of mystery miners processing the BCH and BTC networks at the same time as these firms have been running undercover mining operations in China.

Also read: China Releases New Crypto Rankings

Publicly Listed Companies in China Have Undercover Bitcoin Mining Operations

On May 29, Chinese crypto publication 8btc reporter, Lylian Teng, published a two-part study on a few publicly listed Chinese firms that have been secretly mining bitcoin. The first report came out on April 19 which discussed a construction company that suddenly started mining coins. Huatie Hengan is a subsidiary of publicly listed company Huatie and when investors discovered that the business was mining it caused an investigation from regulators. 8btc detailed that Huatie lost over $23 million during its tenure secretly mining bitcoin under the guise of a cloud computing operation. Additionally, the analyst discovered more publicly listed companies allegedly participating in the mining industry under the veil of secrecy.

In another instance, Wholeasy, a Chinese firm that operates as an internet game brand company in China and internationally has also been allegedly mining coins. The Chinese publication claims that Wholeasy contributed 17.7% of Ebang’s miner sales in 2018. Wholeasy also operates the PC media resources startup Mobcolor, a mobile digital advertising platform. In August 2018, the two firms announced that Mobcolor would “construct mining center for digital cloud computing.” 3G Venture would offer Mobcolor “90MW of power capacity at $0.055/kWh.” Moreover, the reports state that Mobcolor rented 65,000 Ebang mining rigs to another firm called VDIT. Mobcolor advertises support for crypto on its Twitter page whose header photo reads “Go farther with bitcoin.”

Besides Wholeasy, another Chinese operation called RHY has been purportedly building mining farms in places like Iran. A miner named Ma Jingguo told the regional news outlet that RHY is a NEEQ-listed public company in China. RHY does not hide the fact that it participates in blockchain mining and claims to power a 450MW facility with 300,000 miners. According to the miner Ma Jingguo, a great number of RHY mines are located in Iran and the firm was the first operation to invoke the #MininginIran hashtag on social media. In addition to Chinese miners migrating to Iran for extremely affordable electric prices at $0.006 per kilowatt-hour, many also flocked to Sichuan for cheap electricity during the wet season.

The news also follows the recent discussion by bureaucrats who have talked about banning bitcoin mining in China. On April 9, China’s state planner from the National Development and Reform Commission (NDRC) revealed he wanted to eliminate mining activity within the country. Reports claim that the NDRC said “[Bitcoin miners] should be phased out as they do not adhere to relevant laws and regulations, are unsafe, waste resources and pollute the environment.” The publicly listed firms participating in so-called secret mining operations have also occurred coincidently around the time when mystery miners have made up a good portion of the Bitcoin Cash (BCH) and Bitcoin Core (BTC) networks.

During the first month of 2019, blockchain observers noticed a growing trend of unknown miners processing blocks on these networks not seen since the early days. On Jan. 28, mystery miners accounted for more than 22% of the BTC chain’s hashrate and 17% of the hashrate on the BCH chain. Today those figures are lower, but unknown miners still account for 9.7% of the BTC network hash and 13.9% of the BCH hashrate. The mining industry that concentrates on the SHA-256 algorithm has also seen significant growth over the last few months and hashrate has increased on both networks as BCH and BTC values have spiked considerably. Even though crypto prices are high when Huatie Hengan reportedly dropped its construction efforts to quietly mine cryptocurrencies, 8btc’s research estimates the startup lost more than 90% of its net value in less than a year.

What do you think about the publicly listed Chinese companies secretly mining bitcoin? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, RHY, Mobcolor Twitter account, Pixabay, and Coinmetrics.io.

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