A Chinese crypto mogul who says he was once responsible for nearly 10 percent of all bitcoin mining in the world is opening up about how China’s crackdown has decimated his business.
A 40-year-old businessman named Liu Weiman, who spoke to news Web site Caixin (paywall) under a pseudonym, operated more than 10 bitcoin farms in China’s Sichuan province that would mine 70 to 80 bitcoins per day during peak seasons.
About 900 new bitcoins are issued each day globally, meaning Liu was responsible for up to 8 to 9 percent of all bitcoins being mined, according to Caixin.
Liu reportedly built his bitcoin empire in China’s Sichuan province because the mountainous region located in that country’s southwest generates an excess of cheap hydropower during the rainy summer and autumn months.
Liu operated with the regional government’s blessing and was praised as an example of an entrepreneur who used green energy to lift locals out of poverty, the outlet reported.
Entrepreneurs like Liu had helped make China the center of global crypto mining before the government crackdown. The country was responsible for 46 percent of global bitcoin mining in April of 2021, when the digital coin reached its all-time price peak of nearly $65,000.
The US came in at a distant second with 17 percent, according to the outlet.
But as part of a push to reduce carbon emissions, Chinese officials have been putting a stop to bitcoin mining. The government effort began in February in provinces like Xinjiang and Inner Mongolia, where mining was primarily fueled by coal.
Liu and other crypto entrepreneurs in Sichuan had initially hoped they would be safe since their businesses were run through hydropower, some of which would have otherwise gone unused, according to the outlet.
But in May, China’s central Financial Stability and Development Committee said it was necessary to “crackdown on Bitcoin mining and trading behavior” on a national scale, helping to prompt a major sell-off that erased most of bitcoin’s springtime gains.
Then, on June 19, the Sichuan government reportedly ordered the closure of at least 26 bitcoin mining facilities in the province. Two days later, villagers were seen hauling mining machines from one of Liu’s facilities.
China’s crackdown has only led those operations to move elsewhere, including the US.
After the federal authorities’ announcement in May, Liu sent teams employees to search for new potential bitcoin mining locations in North America and Kazakhstan, he told Caixin.
In June, Liu’s company bought an oilfield in Canada that could fuel new bitcoin mines, the outlet reported.
Another Chinese bitcoin mining firm with extensive operations in Sichuan called Bit Mining Ltd. inked a $26 million deal in May to open a crypto mining facility in Texas.
Liu told Caixin he is still considering where to permanently relocate his bitcoin farms. He said any potential location would need to have cheap energy and be safe from the coronavirus.
“This is going to be a brand new adventure,” he said.