"Science and Technology Innovation Board Daily": The strictest ban in history is coming: What are the risks of these 29 listed companies involved in virtual currency mining?

On the evening of the 25th, the Inner Mongolia Development and Reform Commission announced the "Eight Measures of the Inner Mongolia Autonomous Region Development and Reform Commission on Resolutely Crack Down on and Punish Virtual Currency "Mining" Behavior (Draft for Comments)" and solicited public opinions.

The "Draft for Comments" regulates in eight aspects, which can be said to be the most stringent restriction in the history of virtual currency mining. It involves multiple entities such as big data centers, communication companies, and even Internet cafes, individuals, civil servants, etc. The punishment measures also include cancellation of preferential policies, revocation of licenses, suspension of business, inclusion in the blacklist of dishonest persons, referral to judicial organs, referral to disciplinary inspection and supervision organs, etc.

A week ago, on May 18, the Inner Mongolia Development and Reform Commission issued an announcement to set up a virtual currency "mining" enterprise reporting platform to fully accept letters and reports on virtual currency "mining" enterprises. The Inner Mongolia Development and Reform Commission stated to the reporter of "Blockchain Daily" that it will maintain a high-pressure supervision of virtual currency mining.

According to data from the Cambridge Center for Alternative Finance, Chinese miners account for more than 65% of the Bitcoin network's computing power, with Xinjiang, Sichuan, and Inner Mongolia accounting for 35.76%, 9.66%, and 8.06% of the total network computing power respectively, ranking the top three in the country.

Last week, the 51st meeting of the Financial Stability and Development Committee of the State Council clearly proposed to crack down on Bitcoin mining and trading. It is foreseeable that other provinces and cities in my country will follow the example of Inner Mongolia and introduce more stringent measures to crack down on virtual currency mining, and domestic virtual currency mining will gradually exit the stage of history.

Faced with the sudden strong regulation, what will happen to those listed companies involved in virtual currency mining or mining machine business? According to incomplete statistics from public data, the reporter of Blockchain Daily found that there are currently 13 A-share listed companies, 7 Hong Kong-listed companies, and 9 Chinese concept stocks involved in virtual currency mining business. The specific list is as follows.

13 A-share listed companies

1. Xinyuan Technology (300472.SZ): On March 15, 2021, the company signed a sales contract for the "Distributed Storage Center Project" with Jiangxi Shixing Technology Co., Ltd. Xinyuan Technology is responsible for the research and development, supply, installation, debugging, software configuration and data center maintenance of the computing machines and storage equipment required for Shixing Technology's distributed storage center project plan, that is, the construction and maintenance of the Filecoin mine. The total amount of the project reached 580 million yuan, accounting for 119.37% of the company's audited operating income in 2019.

2. Lianluo Interactive (002280.SZ): On May 24, 2021, the company announced that it invested US$14.3072 million in a project under Aoide Capital Limited in April 2019. The investment direction of this project is: mining machines, virtual currency trading and investment in ICO companies. In 2020, a fair value loss of US$5.08 million was recognized, equivalent to RMB 35.0398 million.

3. Futong Information (000836.SZ): The company holds 3.41% of the shares of Shanghai Bohu Investment Management Center (Limited Partnership), which in turn holds 4.67% of the shares of Canaan Technology. Canaan Technology is currently the world's second largest mining machine manufacturer.

4. ST Hanye (600226.SH): The company invested RMB 200 million to hold 99.50% of the shares of Shanghai Yongtang Equity Investment Center (Limited Partnership). Shanghai Yongtang indirectly invested in Hangzhou Canaan Creative Information Technology Co., Ltd. through Bohu Fund. The company's final shareholding ratio in Canaan Technology is less than 1%.

5. Shenzhen Technology (000021.SZ): In January 2018, the company announced that it is one of the well-known domestic manufacturers of Bitcoin mining machines, with an output of about 150,000 units. The company started to introduce this business in November 2017, and it is still in the introduction period so far, and it has not had a significant impact on the company's operating performance.

6. Zhongqingbao (300052.SZ): In January 2018, it announced that its controlling shareholder, Powerleader Technology, is a Hong Kong listed company, and its main business is the development, production and sales of high-performance computer service systems. Powerleader Technology launched the first generation of digital currency mining machine PM108 in November 2017, and the second generation of graphics card mining machine PM208 in January 2018. At present, the orders for the two mining machines have exceeded 1,000 units, mainly sold to Guangdong, Fujian, Jiangsu, Shanghai, Hebei and other places. The company's wholly-owned subsidiary, Baoteng Interconnect, plans to combine the remaining bandwidth and computing power with Powerleader Technology's mining machines to form a shared cloud pool, and engage in digital currency mining by self-use or rental. The shared cloud pool business will be launched in the near future.

7. ST Chenxin (002447.SZ): Its wholly-owned subsidiary Haoxin Internet (Beijing) Network Technology Co., Ltd. has developed the Jingdou Cloud product by introducing blockchain technology. It is a blockchain e-sports acceleration basic service device that allows users to contribute idle network bandwidth and computing power through terminals. As of January 2018, Haoxin Jingdou Cloud devices have sold 200,000 units through direct sales and agency sales, and have more than 500,000 pre-order users.

8. Aikon Technology (002610.SZ): In 2017, its subsidiary Xinjiang Aikon Huicheng Information Technology Co., Ltd. actively carried out the electricity sales and operation and maintenance business of blockchain cloud computing equipment (profitable that year), and operated and managed more than 10,000 bitcoin mining machines in Xinjiang, Qinghai and other places. Later, it sold 100% of the equity of Xinjiang Huicheng for RMB 60 million, with a profit of approximately RMB 41.63 million.

9. ST Zhongying (002464.SZ): In August 2018, it announced that its subsidiary Cailiang Technology had begun to develop its business in the blockchain field in the second half of 2017. It plans to rely on China's rapid development in this field, as well as the company's own technological and industry advantages, to vigorously expand the overseas supercomputing cloud service (mining machine service) market, become a global cloud computing server comprehensive service provider, and form a new profit growth point for the company's business.

10. Zowee Technology (002369.SZ): In January 2018, the company announced that it has been actively developing blockchain business since 2015. Relying on the company's long-term accumulation of electronic product ODM, it cooperated with Xunlei in the form of ODM for CDN "Money Making Treasure". The third generation of "Wanke Cloud" based on blockchain technology has been shipped and has been mass-produced. In early 2017, the company began to develop multi-GPU high-performance parallel computing systems, mainly used in AI, blockchain hash operations (commonly known as mining) and other occasions that require high-performance computing, and has completed trial production and can be mass-produced.

11. China Great Wall (000066.SZ): In August 2017, the company released its semi-annual report. Facing the overall decline in industry demand, especially the sharp drop in demand in the traditional PC power supply market, the company further accelerated the pace of product structure adjustment, seized the hot spots of the Bitcoin network economy and overseas market demand, and achieved substantial growth in mining machine power supply business and overseas market business, effectively driving the development of the overall power supply business.

12. Huatie Emergency (603300.SH): On December 4, 2019, the company received a regulatory work letter from the Shanghai Stock Exchange. The regulatory content is: 1. Please verify and explain to Chairman Hu Danfeng: whether the company, actual controller and its affiliates use Huatie Hengan's Bitcoin "mining machine" for mining. If so, please explain the number and value of Bitcoin "mining machines", the opening of Bitcoin accounts and the actual owners, and whether Hu Danfeng has embezzled or other situations that damage the interests of the listed company. Please ask the lawyer to verify and express his opinion. 2. Please fully verify the rental and use of Huatie Hengan's Bitcoin "mining machine". If there is the above-mentioned use of Bitcoin "mining machines" for mining, please explain the relevant income attribution and cost-bearing entity, and whether the previous financial reports have been accounted for and disclosed for the relevant income, costs and expenses. Please ask the annual review accountant to verify and express his opinion.

13. ST Sanwu (300051.SZ): In November 2013, the company announced that it was considering building a comprehensive Bitcoin platform and acting as an agent for sales of related value-added services, such as expanding Bitcoin-related advertising business, developing Bitcoin mining machines, Bitcoin trading platforms, and Bitcoin payment intermediaries.

9 Chinese concept-listed companies

1. Canaan Technology (CAN): It is a Bitcoin mining machine manufacturer founded in 2013. Its main business is Bitcoin mining machines and sales. According to the 2020 financial report, the revenue from mining machines and other products accounted for 95.5%. Canaan Technology's mining business has been in preparation for a long time and will start operations in the second quarter of 2021. In the second half of the year, the number of self-operated mining will be increased.

2. Ebon International (Ebon): In December 2016, it launched its first application-specific integrated circuit ("ASIC") excavator, called the Ebit E9+ ASIC machine, which is specifically designed for mining certain cryptocurrencies. On February 18, 2021, the company announced the completion of the additional issuance of securities, the establishment and operation of a cryptocurrency mining farm, and the launch of Bitcoin mining operations.

3. The 9th City (NCTY): On February 8, 2021, it announced that the company had signed six legally binding memorandums of understanding (MOUs) with six mining machine owners and purchased Bitcoin mining machines by issuing additional Class A common shares. This batch of equipment will include Bitcoin mining machines of different brands such as WhatsMiner, AntMiner and AvalonMiner, totaling 10,489 units, with a total computing power of approximately 251PH/S. The mining machines have been deployed in Xinjiang, Qinghai, Inner Mongolia and other places. On March 19, 2021, its wholly-owned subsidiary NBTC Limited signed a Bitcoin mining machine purchase agreement with Bitmain. According to the agreement, The 9th City will purchase 24,000 Antminer S19j Bitcoin mining machines, which are scheduled to be delivered from November 2021. After delivery, The 9th City expects the total computing power of its Bitcoin mining machines to reach 2160 PH/s.

4. Bit Digital, formerly BTBT: On January 19, 2021, it announced that its Bitcoin mining business is developing well, and the company actually owns 40,865 mining machines. The Bitcoin mining business can be verified by third-party mining pools HuobiPool and Ant Pool, and the auditor has verified it on site. In addition, the announcement disclosed that Bit Digital earned a total of 1,331.2 Bitcoins in 2020.

5. China Global Shipping (SINO): On February 16, 2021, it announced that it had signed a binding letter of intent (LOI) to acquire a 51% stake in Inner Mongolia Jiulian Intelligent Big Data Park Service Co., Ltd. The transaction is still subject to due diligence review. According to the official press release, Jiulian Intelligent has a 150,000 KW Bitcoin mining computing center and a 50,000 KW Ethereum mining computing center, accounting for approximately 2.8% of the world's Bitcoin computing power and 8.25% of Ethereum computing power, respectively. On March 3, the company announced that it had signed a purchase agreement with Hebei Yanghuai Technology Co., Ltd. to purchase 2,783 digital currency operating servers with a total computing power of 50,440 t/s, and the transaction amount was RMB 30 million (approximately US$4.6 million).

6. BitMining, formerly 500 Lottery Network (WBAI): On January 11, 2021, 500 Lottery Network issued an announcement announcing that the company expects to issue Class A common stock worth approximately US$14.4 million as consideration to acquire the Bitcoin mining machines owned by the seller. To purchase the Bitcoin mining machines owned by the seller, including S17, T17, M20 and S9. On February 26, it was announced that 500 Lottery Network purchased 1,923 Bitcoin mining machines and 2,000 Ethereum mining machines.

7. SOS Limited (SOS), formerly the P2P platform CreditEase: On January 21, 2021, it announced that it had signed a procurement agreement to purchase 14,238 BTC mining machines with a BTC Hash Power (Bitcoin computing power) of approximately 527P; and 1,408 ETH mining machines with a HashPower (Ethereum computing power) of approximately 1,056G.

8. Codechain New World (CCNC): An announcement was issued on February 23, 202, stating that the company has signed an asset purchase agreement with Sichuan Rizhan Cloud Computing Co., Ltd. to purchase 10,000 Innosilicon T2T Bitcoin mining machines for RMB 40 million (approximately US$6.2 million).

9. Ming Yun Tang (MYT.US): On May 10, 2021, it announced that it would accept cryptocurrency payments, including Bitcoin, Ethereum and Dogecoin, starting this week, covering all stores operated by Hunan Sanjiupu Tea Co., Ltd. in China and all restaurants operated by Guokui Management in the United States. Ming Yun Tang decided to start blockchain technology research and cryptocurrency mining business. In addition, management expects to conduct research and development of blockchain-based software and applications in a new subsidiary in China, and promote the commercialization of such applications and cryptocurrency mining.

7 Hong Kong listed companies

1. Huobi Technology (01611.HK): Announced on April 22, 2021, Huobi Asset Management (Hong Kong) Co., Ltd., a wholly-owned subsidiary of the company, has launched its asset management services to three funds investing in virtual assets and a private equity fund investing in virtual asset mining-related projects. Huobi Asset Management can only provide services to professional investors.

2. Xiong'an Technology (01647.HK): On January 9, 2021, it was announced that Yao Yongjie, Chairman of the Board of Directors of Xiong'an Technology, signed a legally binding strategic cooperation agreement with Lion Group Holdings. Yao Yongjie will provide technical advice and consulting in the blockchain field to the company as the chief technical consultant. The two parties will cooperate to establish a fund of no more than US$800 million, which will be used to jointly promote the development of blockchain technology and the industry environment, actively promote business innovation in the field of digital currency, and enable customers to participate in the digital currency market more conveniently. The fund will invest in the construction of mines, mining businesses and upstream and downstream industries of digital currencies such as Bitcoin (BTC) and Ethereum (ETH), but not limited to them.

3. Lotto Interactive Entertainment (08198.HK): On December 2, 2020, the Group announced that it had turned profitable in the third quarter of 2020, during which the Group's big data center services generated revenue of approximately HK$152.6 million. With the third big data center commencing operations in late June 2020, the Group currently operates three big data centers and provides customers with a full range of services including venues, hardware support, power supply, supporting monitoring and management. The customers of the Group's big data centers are mainly engaged in cryptocurrency mining.

4. Sun International Holdings Limited (08029.HK): On March 29, 2021, it announced that its indirect wholly-owned subsidiary purchased cryptocurrency mining equipment for RMB 50 million. On May 24, Sun International Holdings Limited announced that the Group will support and comply with the instructions of the Chinese government to stop relevant mining activities in China. In this regard, the Group will discuss with relevant service providers and take necessary actions to continue its cryptocurrency mining activities in other countries or regions.

5. PCN Group (01263.HK): The Group is mainly engaged in the design, manufacturing and trading of graphics cards for desktop computers, electronic manufacturing services, and the manufacturing and trading of other personal computer related products and parts. According to the 2020 financial report business outlook, NVIDIA recently announced the launch of a cryptocurrency mining processor ("CMP") designed specifically for cryptocurrency mining applications, and PCN was appointed as one of the partners to deliver CMP solutions to meet the needs of cryptocurrency mining.

6. Synergy Communications (1613.HK): Announced on April 19, 2021, it signed a share subscription agreement with Yaoling Co., Ltd. According to the transaction completion agreement, Synergy Communications holds 3.33% of the shares of Yaoling Co., Ltd. It is mainly engaged in open intelligent blockchain platforms and storage mining technologies (storage mining technology) related to blockchain and distributed cloud computing.

7. Yuxing Technology (8005.HK): Announced on May 14, 2021, it signed a RMB 290 million cryptocurrency equipment procurement agreement with Wuhan Quanyaocheng Co., Ltd. The equipment consists of 2,416 A10 pro 6G and 7G devices owned by the seller for cryptocurrency mining.

Special statement: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk. (Science and Technology Innovation Daily)