China’s crackdown on its crypto mining sector, which began earlier this year, resulted in a massive exodus of mining companies to friendlier jurisdictions. Miners have been relocating massive amounts of coin minting hardware to new locations around the world, with Russia reportedly taking the lion’s share among several appealing destinations, including the United States.
Most Chinese mining rigs are accepted in Russia, Kazakhstan, and the United States.
The influx of Chinese miners in several countries that offer either regulatory clarity or cheap energy has been accompanied by a large transfer of mining equipment. 14 of the world’s largest crypto mining companies have evacuated more than 2 million mining machines from the People’s Republic since the Chinese government launched a nationwide crackdown on the industry in May.
North America and Central Asia have become mining hotspots, but Russia has risen to the top. According to the report, at least 205,000 mining devices were transported to the Russian Federation out of a total of over 430,000. Following China’s decision to go after bitcoin miners, the Russian firm Bitriver received 200,000 machines from Chinese miners, while the Moscow-based Bit Cluster received an additional 5,000.
Kazakhstan, a neighboring country, has also emerged as a major mining destination. The country, which has a capped electricity rate, now has a slew of data centers run by Chinese mining firms. The majority of the relocated 87,849 Chinese mining rigs came from Bitfufu, which shipped 80,000 machines to crypto farms in Kazakhstan, and BIT Mining, which deployed 7,849 devices by August, according to the FT figures.
Both former Soviet republics are dealing with issues related to their burgeoning crypto industries. Russia has yet to regulate the sector, with officials increasingly believing that mining should be recognized as a business activity and taxed accordingly. Kazakhstan is experiencing power shortages, which are being blamed primarily on cryptocurrency miners, and authorities are considering requiring miners to register and charging a higher electricity tariff.
According to the data, eight of the ten largest crypto farms in North America have increased the number of mining devices they host since the Chinese ban went into effect. The United States is right behind Central Asia, having accepted 87,200 mining machines from China. Canada comes in fourth with 35,400, followed by two South American countries, Paraguay (15,500) and Venezuela (7,000).
China’s liquidations have lowered the price of mining equipment such as the popular Antminer S19. The model’s value fell by nearly 42 percent between May and July, according to the newspaper, which cited market data provided by mining company Luxor.
Bitmain, a Chinese mining hardware manufacturer that manufactures and sells the S19 device, announced in June that it would suspend sales to “help the industry transition smoothly” and reduce market pressure. “The market’s focus has shifted from a lack of equipment to a lack of space for its placement,” said a representative of Russia’s Bitriver.