Bitmain Slapped with $3.5M Fine Amid China’s Crypto Clampdown
Bitmain, a leading Bitcoin mining-focused manufacturer based in Beijing, is facing a $3.5 million fine for unpaid taxes in China. The fine is attributed to the company’s failure to withhold individual income tax over a certain period. Despite receiving a communication from the State Administration of Taxation Beijing in August 2022, Bitmain did not pay the withheld tax, which amounted to about $2.4 million.
This incident highlights the ongoing scrutiny of the cryptocurrency industry in China. In recent years, the Chinese government has taken several measures to curb the crypto market, including banning crypto mining and targeting underground operations. One notable case involved a former Chinese Communist Party (CCP) secretary who helped a crypto mining operation continue its activities.
However, Hong Kong seems to be taking a different approach, attempting to establish itself as a crypto hub. In contrast to the crackdown on cryptocurrencies, China is actively working on its digital yuan and continues to run extensive pilots for the Central Bank Digital Currency (CBDC).
Despite facing fines and a significant drop in mining profitability, Bitmain remains operational. The company’s latest Antminer Bitcoin mining hardware sold out in seconds in December 2022. Additionally, Bitmain founder Jihan Wu set up a $250 million fund in September 2022 to acquire Bitcoin mining assets after leaving the company and establishing Bitdeer, a Bitmain spin-off.