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Cryptocurrency Price Check: China Intensifies Crackdown, Sending Cryptos Lower

Cryptocurrency prices have been sent reeling by the latest crackdowns in China.
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Cryptocurrency prices were falling Monday as China reportedly intensified its crackdown on crypto mining firms.

Bitcoin, the world's largest cryptocurrency, declined 4.7% to $32,575 over the last 24 hours, while Ethereum, the second-biggest digital currency, dropped 5.7% to $1,974.83, according to CoinDesk. Dogecoin was down almost 15%.

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A government official in the Chinese city of Ya’an told at least one
Bitcoin miner that the city has promised to root out all Bitcoin and Ether mining operations within a year, Bloomberg reported, citing a person with knowledge of the situation.

Also, the Agricultural Bank of China, one of the country’s biggest banks, published a statement outlining a ban that prohibits customers from doing any business via cryptocurrencies.

China's crackdown on cryptocurrency mining extended to the southwest province of Sichuan, Reuters reported, where authorities ordered cryptocurrency mining projects closed in the major mining center.

China reiterated a call for a crackdown last month on Bitcoin mining and trading, while the People's Bank of China said digital coins weren't "real currencies."

"The Sichuan regulation is critical and huge," said Winston Ma, adjunct professor at New York University School of Law. "It means even mining with renewable subject to the new crackdown. As a result, the sweeping mining crackdown in China has led to a decline of global hashrate, as well as pressure on crypto trading markets."

Winston Ma, author of "The Digital War-How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace," said that "by now, the four largest mining regions -- Inner Mongolia, Xinjiang, Yunnan and Sichuan -- have implemented similar crackdown measures, even though mining in the latter two are mostly based on hydropower, whereas the first two are on coal." 

"The China mining crackdown is essentially national," Ma said.

David Lesperance, managing partner of Lesperance & Associates, said that "there is an epic war brewing in China." 

"On the one hand is the government's desire to completely own the space of money with the e-yuan," he said. "When combined with social scoring and facial recognition, this will give them complete power over the population. If you do something they don't like and all you have are e-yuan, they can target you and strip you of your assets in an instant."

On the other side, Lesperance added, "are alternatives like ANT and Alipay, which are quickly being subjugated by the government."

"Those who are not extremely careful will be like the ransomware group and discover to their horror that governments have an ability to find and seize that is greater than they suspected," he said.

Meanwhile, Zak Killermann, a fintech and crypto expert with Finder, said Portugal granted its first official crypto exchange operating license, while H-E-B grocery stores in Texas will soon offer cryptocurrency kiosks in-store, allowing customers to pay for groceries using crypto.

Fred Ehrsam, co-founder of cryptocurrency exchange platform Coinbase Global  (COIN) - Get Free Report, recently said that 90% of NFTs will have no value in three to five years.

This statement "comes as little-to-no surprise to veteran traders," Killermann said, who have seen Initial Coin Offerings "rise and fall in the span of days."

"Folks investing in crypto should always be doing their own research instead of hopping on the latest trend," Killermann said.

He added that the recent drop of Iron Finance's TITAN token to nearly zero "highlighted the need for research."

Iron Finance said last week that the TITAN crash was due to "the world's first large-scale crypto bank run," in which large investors in TITAN began to sell, prompting a further selloff.