Bitmain Tax Woes Show China’s Continued Crypto Scrutiny
Bitmain faces a $3.5 million fine for unpaid taxes in Beijing, China. The Bitcoin mining-focused manufacturer has been fined for withholding unpaid individual income tax.
Bitmain could be fined $3.5 million for not paying taxes in Beijing. New reports show that Bitmain has received a notification from the Beijing State Tax Authority about the tax violations.
Bitmain designs application specific integrated circuit (ASIC) chips for Bitcoin mining and is headquartered in Beijing. It is one of the most well-known companies in the space.
Although the fine should not affect the company’s finances too much, it is a sign that the scrutiny of the crypto industry in China remains as widespread as ever.
The notice also states that a communication was sent to Bitmain in August 2022. However, it states that Bitmain failed to withhold individual income taxes of about $2.4 million.
Companies in China will have to keep an eye on their operations, especially since the country does not adopt a favorable attitude towards crypto. However, Hong Kong is opening up to the crypto industry and trying to become a crypto hub.
China is cracking down on the crypto industry
Among the moves that China has taken to crack down on the crypto market is going after the mining industry. China has banned crypto-mining, although it still takes place via underground operations. A big headline in recent weeks was related to the fact that a former secretary of the Chinese Communist Party (CCP) was helping a crypto mining operation. A Chinese court also ruled that cryptocurrency mining negatively affects the climate.
While the country is cracking down on cryptocurrency, it is making progress with its digital yuan. The country continues to run CBDC pilots, each more comprehensive than the last.
Bitmain operations unaffected for the past 12 months
Despite any fines and crypto winters, Bitmain continues to function well enough. The company’s last Antminer Bitcoin mining hardware sold out in seconds in December 2022. This happened despite mining profitability falling by 75% in 2022.
Bitmain founder Jihan Wu also set up a $250 million fund to buy assets related to Bitcoin mining assets in September 2022. Wu left the company in 2021, to establish Bitdeer, a spin-off of Bitmain.
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