Bitmain is facing a fine of $3.5 million for unpaid taxes in Beijing, China. The Bitcoin mining-focused manufacturer has been fined for withholding unpaid individual income tax.
Bitmain could face a fine of $3.5 million for not paying taxes in Beijing. New reports show that Bitmain has received a notice from the State Administration of Taxation Beijing about the tax violations.
Bitmain designs application-specific integrated circuit (ASIC) chips for Bitcoin mining and is headquartered in Beijing. It is one of the most well-known companies in the space.
While the fine should not affect the company’s finances too much, it’s a sign that the scrutiny of the crypto industry in China is still as prevalent as ever.
The notice also states that a communication was sent to Bitmain in August 2022. However, it states that Bitmain failed to withhold individual income tax amounting to about $2.4 million.
Companies in China will have to keep a close eye on their operations, especially since the country does not take a favorable stance towards crypto. However, Hong Kong is opening up to the crypto industry and is attempting to become a crypto hub.
China Clamping Down On Crypto Industry
Among the steps that China has taken to crack down on the crypto market is going after the mining industry. China has banned crypto mining, though it still takes place via underground operations. One major headline in recent weeks related to the fact that a former Chinese Communist Party (CCP) secretary helped a crypto mining operation operate. One China court also ruled that cryptocurrency mining affects the climate negatively.
While the country is cracking down on cryptocurrency, it is making headway with its digital yuan. The country continues to run pilots for the CBDC, each more extensive than the last.
Bitmain Operations Unaffected in the Last 12 Months
Despite any fines and the crypto winter, Bitmain continues to function well enough. The company’s latest Antminer Bitcoin mining hardware sold out in seconds in December 2022. This happened in spite of the fact that mining profitability dropped by 75% in 2022.
Bitmain founder Jihan Wu also set up a $250 million fund to buy assets related to Bitcoin mining assets in September 2022. Wu left the company in 2021, going to establish Bitdeer, a spin-off of Bitmain.
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