Xiao Yi, an official of the Chinese Political Party, has been called out for alleged abuse of power.
Xiao Yi, a former vice-chairman of Jiangxi provincial committee of Chinese People’s Political Consultative Conference has allegedly abused his power to lend credence to cryptocurrency mining activities, against the government ban on all mining activity. He has consequently been expelled from the Chinese Communist Party (CCP). This was announced by the Central Commission for Discipline Inspection (CCDI), on Nov. 13, 2021. The CCDI is a body that enforces internal rules and regulations and combats corruption in the Chines Communist Party.
Xiao Yi also contravened rules surrounding irregular project spending, bribery, and interference in judicial activities. The CCDI said that Xiao Yi is likely to face a criminal trial.
Xiao pushed cryptocurrency mining when he was party chief of Fuzhou, Jiangxi province, since 2015, hoping to make mining a “competency” of Fuzhou. He led a delegation on a trip to Germany to help Chuangshiji Technology in the Fuzhou High-Tech Industrial Development Zone partner with cloud mining provider Genesis mining, to host 500000 servers in Fuzhou to mine crypto, in a move that may have accelerated the consummation of the mining ban.
Over-regulate, then pull the trigger
According to Forbes, China over-regulated Bitcoin before banning it, while planning to roll out its own CBDC, the digital renmimbi (RMB). The CBDC aims to offer the sheen of the convenience of conventional cryptocurrencies, with no decentralization and privacy benefits. Central governmental control does not track with crypto’s borderless and unregulated nature, hence it was rejected by China.
How Chinese ban unfolded
China held the title of the world’s largest bitcoin mining region in the first half of 2021, but was soon surpassed by the U.S.A. Over 90% of cryptocurrency-related businesses shut down in China as of October 8, 2021 after the broad and sweeping ban by the People’s Bank of China and the National Development and Reform Commission on Sep. 24, 2021. In 2017 China shut down the local cryptocurrency exchanges, while in 2019, trading cryptocurrency was banned in China, with the central bank saying that they will block websites to cryptocurrency exchanges, domestic and foreign, and Initial Coin Offerings.
In May 2021, the government banned institutions and companies from providing cryptocurrency-related services, and three bodies, namely the China Banking Association and the Payment, the Clearing Associations of China, and the National Internet Finance Association of China released a statement informing that offering registration, clearing, settlement, and trading is not allowed. A month later, the government ordered banks to stop aiding transactions and issued bans on mining cryptocurrencies.
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