Key Takeaways
- Reportedly, the Chinese tax authority fined Bitmain about 25 million Chinese yuan ($3.7 million).
- Notice claims that Bitmain had failed to pay personal income tax amounting to 16.6 million yuan, or $2.4 million.
Leading Beijing-based Bitcoin mining firm Bitmain is facing fines from the Beijing Municipal Office of the State Administration of Taxation for violating tax regulations in the country.
Reportedly, the tax authority had fined Bitmain about 25 million Chinese yuan ($3.7 million). As per local media reports, a notice regarding the tax violation was sent to Bitmain in August 2022. However, it states that Bitmain had failed to pay personal income tax amounting to 16.6 million yuan, or $2.4 million.
According to reports, Bitmain was fined on April 4, 2023, for its alleged tax violations related to taxes on the income from Bitmain employees’ salaries, labor dividends, bonuses, and allowances, among others.
The latest movie is part of China’s increasing efforts to crackdown on the crypto sector. In 2021, Chinese regulators a blanket ban on all crypto transactions and mining. The crackdown forced some of the world’s largest Bitcoin mining operations to seek out new bases for operations with friendly regulations and the essential ingredient of cheap electricity to run thousands of computers around the clock.
Since the blanket ban on crypto mining has impacted Bitmain too, it is unclear how the firm has been carrying out its operations in the country. The People’s Bank of China has long stood with the opinion that the ban on cryptocurrencies was to curtail financial crime and prevent economic instability. However, the ban hasn’t proved to be effective in deterring miners from carrying out their operations.
Following the ban, reports have revealed several underground mining operations have since emerged in the country, with crypto miners taking special care to work around Beijing’s ban. The latest development on Bitmain also comes amid reports that the world’s largest crypto exchange Binance’s employees and volunteers have people helping forge documents to bypass the crypto ban in China.
Following the government ban on mining in June 2021, the reported hashrate for China fell to zero during July and August. However, the reported hashrate suddenly spiked back to a staggering 30.47 EH/s in September 2021, putting China in second place globally in terms of installed mining capacity ie 22.29% of the total market.
