March 30, 2026
By Shubhii Verma
China has fined a large polysilicon manufacturing company in Xinjiang 100 million yuan (about $14.5 million) for secretly supplying electricity to power Bitcoin mining operations.
Bitcoin mining has been illegal in China since 2021. The government has repeatedly warned companies not to support crypto miners in any way — including providing electricity, internet access, financial help, or equipment.
What happened?
Authorities found that the company was selling cheap industrial electricity to Bitcoin miners. In regions like Xinjiang, electricity is produced in large amounts and sold to factories at low prices. Some companies have been misusing this cheap power by quietly redirecting it to crypto miners for profit.
Legal experts said this breaks China’s Electric Power Law. If electricity were diverted by bypassing meters or stealing power, it could even be treated as a criminal offence. Besides the fine, the government also took back any illegal earnings made from this activity.
Why is China strict about this
In early 2026, several top government bodies, including China’s central bank, issued a joint notice saying all virtual currency-related activities are illegal financial activities. This was meant to close any remaining loopholes.
China wants its electricity to be used for priority industries like advanced manufacturing, battery material production, and green energy projects. For example, in Xinjiang, solar power is now used to produce hydrogen fuel for refineries and even homes. The government sees crypto mining as wasting energy that could be used for more important national projects.
Bigger crackdown on mining
Officials are now inspecting industrial parks and data centres to ensure no mining is happening. Provincial governments are responsible for shutting down any hidden operations.
In December 2025, a major crackdown in Xinjiang shut down hundreds of thousands of mining machines, causing Bitcoin’s global network power (hashrate) to drop by about 18% in a single day.
China has also banned companies from helping miners in any way — even mining machine manufacturers cannot sell equipment inside the country.
The message is clear: China wants to eliminate illegal crypto mining and keep tight control over digital currency activities.
