Chinese Region to Shut Down 'Illegal' Bitcoin Miners By September

China's Xinjiang Uyghur autonomous region is set to eliminate "Illegal" bitcoin mining operations by the end of August, a government agency has confirmed to CoinDesk.

Rumors first emerged online over the weekend after the leak of a government notice issued by Xinjiang's Economic and Information Commission indicating the authority was demanding that local utility companies report and shut down illegal bitcoin mining operations.

According to the document's definition, illegal bitcoin miners refers to any operation that is not registered with the government as a licensed business entity or has been using electricity without formal contracts with utility firms.

"Local utility agencies and companies will be held accountable if they failed to shut down 'illegal' bitcoin mining operations," the EIC writes.

The effort follows a notice issued in January that required Xinjiang's utility companies to make regular reports to the authority on local bitcoin activities as part of a wider move to eventually guide these entities to an "Orderly exit" of the business in the region and nationwide.

Scott Meng, the chief executive of a Canadian blockchain startup who also jointly owns mining farms in the region, told CoinDesk that the government's notice early this year "Definitely had impact" on bitcoin mining operations.

In June 2017, the EIC also issued a notice to municipal governments asking them to be careful when supporting bitcoin mining companies.

Those orders were issued at a time when bitcoin miners were increasingly looking to the cheap electricity and vast land resources available in regions like Xinjiang as means of boosting their operational profits.

In November 2016, Bitmain notably announced a plan to build a datacenter for bitcoin mining in Xinjiang.

The firm declined to confirm to CoinDesk for this article if it is still operating any mining farms in the region.