Discussing the eight measures to punish "mining" in a certain place

On May 25, 2021, a certain autonomous region organized and drafted the "Eight Measures of the Development and Reform Commission of a Certain Autonomous Region on Resolutely Cracking Down on and Punishing Virtual Currency "Mining" Behavior (Draft for Comments)", and the time for soliciting opinions is from that day to June 1, a total of five days. The email address for feedback is: [email protected]. The way to feedback is also fax, but unlike the previous solicitation of opinions, the address and contact person for mailing feedback were not given this time. The establishment of a link for soliciting opinions before issuing measures should be appreciated. This shows that the regulators and rule makers respect the regulated and enforced, and it is a manifestation of a more civilized operation of power.

Let’s study and research the specific measures together:

1. The underlying logic behind the measures: environmental protection

From the text, we found that whether it is the description of the "dual control target tasks of energy consumption" in the announcement, or the first article about "strengthening energy conservation supervision and reducing energy consumption budget indicators", as well as the legal sources "Energy Conservation Law" and "Electricity Law", etc., all show that they are concerned about the environmental problems caused by virtual currency mining and have formulated severe measures to crack down on and punish it.

2. Not limited to BTC, but also expanded to virtual currencies

At the meeting of the Financial Stability and Development Committee of the State Council on May 21, 2021, it was clearly proposed to crack down on Bitcoin mining and trading. However, a certain autonomous region has proposed disciplinary measures to expand the crackdown on Bitcoin mining to crackdown on virtual currency mining. The energy consumption problem of Bitcoin is an objective fact. As for some scholars and industry insiders who have proposed that wind power transportation consumes a lot of energy, it is better to mine and cash it out locally, there are different opinions.

At the same time, from the actual situation of mining machines, the consumption of home mining equipment for some currencies is extremely small, and can even be used on the office desk. Whether to treat them differently, it is more prudent to make decisions based on the research on the energy consumption of various mainstream virtual currency mining machines. Otherwise, once the measures are implemented, it will be embarrassing to find that some mining machines consume less energy than a mobile phone.

3. Revoking the value-added telecommunications business license of mining companies may lead to administrative litigation

The third measure is to revoke the value-added telecommunications business license for telecommunications companies, Internet companies and other entities that engage in virtual currency mining in accordance with the Telecommunications Regulations. Through searching, we found the relevant provisions on revoking licenses in the Telecommunications Regulations, namely Articles 56, 57, 58, and 77, and did not find any circumstances covered by legal norms. As public law, administrative regulations are mainly to constrain the behavior of public power agencies. If the behavior of market entities is to be sanctioned, there must be clear provisions, otherwise it may lead to administrative litigation risks. Although there are not many administrative lawsuits in reality, it may affect the local business environment and reputation. It is recommended to consider carefully.

4. Can the mining entity that “privately accesses the power supply without approval” be treated as theft?

The crime of theft is a crime for protecting citizens' property rights as stipulated in Article 264 of the Criminal Law of the People's Republic of my country. The legal interests protected by this crime are not the economic management order or the social order, but the simple property rights of ordinary people. Without approval, this administrative approval power is not the content protected by the crime of theft. Therefore, whether the crime of theft is constituted has nothing to do with whether it is approved, but only with the constituent elements of the crime of theft. In view of this, the "legality of crime and punishment" and the seriousness of the law need to be maintained by all parties.

5. Using virtual currency to illegally raise funds will be strictly dealt with in accordance with the Illegal Fund Raising Regulations

There is controversy in the academic community about whether virtual currency is a means or object of illegal fundraising. In 2013, my country defined Bitcoin as a "specific virtual commodity". The Research Office of the Supreme Court issued a "Research Opinion on the Qualification of Using Computers to Steal Others' Game Currency for Illegal Sales and Profits", which defined virtual currency as "electromagnetic data". In practice, whether virtual currency can be regarded as "funds" is controversial.

Illegal fund-raising absorbs funds rather than physical objects from unspecified people. Therefore, before there is a new judicial interpretation, treating virtual currency as funds and handling it using the illegal fund-raising regulations does not have a solid legal basis. It is recommended to be cautious and wait for the legislation or the highest judicial authority to make a determination before handling it.

6. Treatment of Miners

The author consulted someone who studies party regulations, “Public servants who use their positions to mine virtual currencies or provide convenience and protection for them will be transferred to the disciplinary inspection and supervision authorities for handling.” This question can be broken down into two small questions: 1. Is mining illegal or a crime? 2. The boundaries of providing convenience and protection.

At present, there is still controversy as to whether mining is illegal or a crime, with verdicts in different places varying widely and even contradictory. Regarding providing convenience and protection, even if mining constitutes a crime, it is not an organized crime of a mafia nature and does not involve the issue of protective umbrellas. It is not appropriate to use such broad terms as "providing convenience and protection" and adjustments are recommended.

Final Thoughts

It is not easy to establish a reputation for a region's business environment, but it is easy to influence it. We believe that the original intention of introducing the eight measures is good, and it is commendable for protecting the green mountains and clear waters. However, the research and judgment of administrative measures requires solid legal support and scientific research data.

On May 21, the Financial Stability and Development Committee of the State Council just proposed to "crack down on Bitcoin mining and trading activities", and on May 25, provincial-level measures were designated. The time was short and the scope of the crackdown required by the State Council was expanded. However, it is worth affirming that the eight measures are not finalized at present, but the public is given five days to provide feedback, which is worthy of recognition.

I hope that practitioners will not complain about themselves, and report the truth from the frontline to the regulators, which is what law-abiding citizens should do. Although the law lags behind, it is widely respected because of its stability. We are on the road of pursuing rule of law, fairness and justice...