China's Xiangtai food Co. buys 686 spot Bitcoin miners despite mining ban

Xiangtai Food Co., Ltd., a Nasdaq-listed Chinese food company has bought 686 spot Bitcoin miners that are worth US$6 million via its United States subsidiary called SonicHash LLC. While the mining operations would be continued in New York, the fact that the Chinese government has issued an all-out ban against crypto companies could brew some trouble for the firm back home.

By the end of January 2022, the freshly bought miners should be delivered to the Company’s mining facility location in Carthage, NY, in two to three weeks. As a result, once all miners are operational, the Company’s entire mining activities are estimated to consist of 1,428 Bitcoin miners, producing roughly 132.2 PH/s. Based on Bitcoin’s average price of US$49,628/BTC for the past month, the Company expects to make roughly US$11 million in revenue and US$7.7 million in cash contribution margin for the first year.

Recently, a District Court in Beijing rejected a plea of the plaintiff seeking compensation from a Bitcoin mining company over losses incurred on his investment. The court deemed the case invalid as mining is a prohibited business in China.

China accelerates its CBDC roll-out plans

While China’s no-nonsense approach towards cryptocurrencies is nothing new as they have banned cryptocurrency over a dozen times in the past decade. However, the Beijing government is now looking to accelerate its digital yuan official public launch event. Many belive China is eyeing the Winter Olympic launch for e-CNY as the whole world’s attention would be on them.

China began its CBDC research and development as early as 2014 when most of the countries were not even aware of Bitcoin and the whole crypto market. The development of the digital yuan was completed in late 2019 and since then the government has been testing its use in various sectors. Digital yuan’s first use case came in the form of traveling allowances for government employees and was later expanded to include various other sectors and provinces. Yesterday, WeChat, the biggest social messaging and payment app with over a billion users announced it would integrate e-CNY payments on its network.

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An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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