Crypto Mining Firm Bitmain Faces $3.5 Million Fine for Tax Violations in China
Bitmain is a cryptocurrency mining company that is currently under fire on account of regulatory pressure stemming from the Chinese government. The firm has been charged with tax violations by Chinese financial regulators in Beijing.
This crypto mining firm works around Bitcoin mining-related services and is accused by the regulators of withholding unpaid income tax payables. To this end, the firm has reported receiving a ticket for $3.5 million as a penalty to the Beijing financial regulators.
Crypto Scrutiny in China
Local media outlets have reported that the firm has received notification of the legal violations from the State Administration of Taxation Beijing. The main product of the crypto firm is the creation of ASIC or application-specific integrated circuit chips that are used by Bitcoin miners.
The firm is based out of Beijing and it is known around the world for its Bitcoin and chip manufacturing services within the crypto sector. There is currently a war going on between the leading nations in the world to take over the chip manufacturing units and get ahead in their technical prowess.
The government of China imposed a mass exodus on its native crypto sector in 2019. With the effect of this ban all mining, trading, and other activities related to crypto were banned in the country.
The current regulatory action against Bitmain is another step in the same series. The $3.5 million fine amount is not a devastating penalty for Bitmain but it has renewed the strict stance of the Chinese government on the matter of crypto regulations.
The notification issued by the government informed that the violation was notified to the company in 2022. The news about this matter has alerted other companies in the same sector about revisiting their finances to escape any regulatory action.
On the other hand, many tech enterprises are considering moving their crypto-related operations to Hong Kong which has retained crypto-friendly policies. Since the national ban on crypto, crypto mining operations have gone underground in China. One headline has revealed that a former member of CCP was lending help to a mining rig for remaining operational.
Any type of regulatory action can make a significant impact on the stocks of a company. However, Bitmain is a private enterprise and the firm has absorbed pressures from the crypto winter and taxation fines without sustaining major lapse.
Bitmain’s Latest Product
The firm recently launched its latest product named Antminer Bitcoin hardware which was well-received and reported the first SKU sales in a matter of seconds in 2022. When the product was sold out, the crypto industry was going through a hashrate decline and a profitability drop of around 75%.
Jihan Wu has founded Bitmain and he has set up a $250 million fund since September 2022. This fund is directed toward purchasing assets to support Bitcoin mining production and operations. He parted ways with the company in 2021 and started working on a new project called Bitdeer.
Bitdeer is another version of Bitmain that works as its new alternative. With the tax violation notice, the Chinese government has reasserted its stance towards the crypto sector maintaining its former position on the matter.
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