- Ethereum mining pool Sparkpool will shut down its operations due to China’s crypto ban.
- Sparkpool will send details about the shutdown through announcements, emails, and in-site messages.
- Crypto companies are feeling the effects of Chinese regulations.
Days after China announced its most serious crackdown on the crypto market, its effect on the crypto mining industry is showing up now. Sparkpool, the world’s second-largest Ethereum mining pool, announced that it is suspending its operations in China.
Additionally, the company said it will now suspend the mining pool services for all of its existing China-based — as well as international — customers by the end of this month.
In its announcement, Sparkpool said that its closure is a response to Chinese regulatory policy requirements. Sparkpool further said that it will provide information through emails and in-site messages till September 30th with details on how to withdraw their funds.
The shutdown of Sparkpool comes at a time when Ethereum continues its switch from a proof-of-work consensus mechanism to a proof-of-stake model in 2022, which is a part of the long-planned upgrade known as Ethereum 2.0.
Chinese Clampdown Intensifies
The shutdown of Sparkpool mining pool comes amidst a renewed crackdown on cryptocurrency by Chinese authorities. In recent months, China has intensified its restrictions on cryptocurrencies with bans on activities such as mining and trading.
The People’s Bank of China (PBoC) also banned the country’s banks and payment services firms such as Alibaba from providing crypto transaction services.
China has been gradually clamping down on crypto since 2017 when the PBoC prohibited financial institutions from conducting crypto transactions; however, its efforts have increased of late. Unlike previous bans, authorities have also increased surveillance and are enforcing stricter penalties on those found running illegal crypto operations.
Following the restrictions, companies dealing with cryptocurrencies in China are likely to either shut down or move abroad to avoid running afoul of the new regulations. Sparkpool wasn’t the first company to close because of China’s crackdown.
Two of the largest crypto exchanges in the world- Binance, and Huobi, have also stopped allowing users to sign-up from China.
Moreover, in recent months crypto miners have shifted their operations to other countries, and China’s crackdown has benefited miners in places like Canada and North America.