Government authorities in China's Sichuan province will investigate the local bitcoin mining firms which are reportedly been constructed without the official approval, local media agency Sina reports on May 30.
One of the state-owned newspaper in Sichuan released a front-page article on Thursday stating that the land-resource bureau in Sichuan's Garze county has discovered bitcoin mining farms with no prior approval developed at the sites of hydropower stations.
The article further stated that the Economic and Information Bureau in Garze county, a mountainous area with an ample of water resources has built a committee with various local agencies to carry out an investigation in the illegal construction issue.
Situated at the Bitcoin "global mining capital" of Sichuan, bitcoin mining firms consisting of more than 30,000 bitcoin mining machines are being built without any validation from the local government and thus became subject for further investigation.
One of the agents belonging to the nation's Economic and Information Bureau stated:
"We are still investigating the issue and can’t disclose more details on the overall situation."
As claimed by various local news outlets, the illegal mining farms have been constructed alongside the Dadu river in northwestern Sichuan. This Chinese river will host the world's biggest embankment dam known as Shuang Jiang Kou, that is basically under construction. All the mining operations are carried out in this area as it provides one of the cheapest electricity prices for mining bitcoin.
Recently, Chinese authorities have found a huge bitcoin mining farm located inside a hydropower plant known as Ginkang Station. The plant has the ability to host 50,000 units of bitcoin mining equipment, out of which 60% are already functioning.
One of the officers belonging to the local land resource stated:
“If [a bitcoin mining farm] is built within the authorized area of a power station for electricity consumption, we need to verify if their usage is legal. If it’s outside the authorized area, then it needs to be dealt with as the construction was not approved.”
As per November 2018, blockchain-related Coinshare has released a report which indicated that around 50% of the world's Bitcoin network hashrate arrives from mining operations based in Sichuan province.
Based on the report by Sina, 70% of the world's bitcoin is being mined in the Sichuan province, just because of the Dadu River Basin's electricity capacity.