The Chinese Embassy has cautioned Chinese Bitcoin miners in Angola following the official ban on crypto mining in the Southern African country.
Earlier this year, the Angolan parliament passed legislation criminalising cryptocurrency mining and related virtual assets to safeguard national energy security. The ban, effective on April 10, prompted the Chinese embassy to warn its nationals against violating the law.
The embassy gave the warning on April 20, 2024, to remind Chinese crypto miners that the new Angolan crypto laws have taken effect and emphasised the sanctions awaiting those involved in mining in the future.
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Environmental and economic concerns of crypto mining
Over the years, Chinese Bitcoin miners have sought new operational bases due to China’s crypto ban. This quest has steered their attention towards African nations offering low-cost electricity, including Ethiopia and Angola. However, with Angola now prohibiting such activities, offenders face severe penalties. According to the Chinese embassy, possessing cryptocurrency mining equipment could lead to up to five years of imprisonment and confiscation.
Meanwhile, those directly involved in mining could face up to 12 years in prison, and individuals utilising power facility licences may confront up to 8 years of imprisonment.
The Chinese embassy also reiterated the common concerns associated with crypto mining. They highlighted its significant energy consumption, carbon emissions, and potential disruption to a country’s economic and financial order.
“At present, China has completely banned virtual currency transactions and stipulated that ‘virtual currencies do not have the same legal status as legal tender’ and ‘engaging in virtual currency-related businesses is illegal financial behaviour,’” the embassy stated.
Angola’s Crypto Mining History
In Q4 2023, Angola emerged as the 8th largest hub for Bitcoin mining companies, a significant development with potential repercussions. The impending Bitcoin mining ban in Angola is poised to adversely affect the sentiments of Bitcoin enthusiasts. The country’s Bitcoin mining sector stood out in Africa, exerting substantial pressure on its energy consumption.
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This strain reportedly led to challenges in providing uninterrupted electricity to households, attributed to the substantial energy demands of Bitcoin mining operations. These power-related issues were pivotal in formulating laws banning cryptocurrency mining activities. The intersection of energy consumption, regulatory responses, and cryptocurrency mining underscores the complex dynamics shaping the digital currency landscape in Angola.
Angola’s new crypto law shows that the global Bitcoin mining sector is significantly evolving and is influenced by multiple factors. One key event is the recent halving, which reduced mining rewards from 6.5 BTC to 3.25 BTC. Notably, reports stated that the event could trigger multibillion-dollar revenue declines in miners’ revenue due to the rising cost of their operations. Other factors, such as environmental considerations and government policies, also profoundly impact Bitcoin mining operations. Still, stakeholders believe the industry has a bright future, especially as its environmental, social, and governance (ESG) properties continue improving.