Beijing-based cryptocurrency mining company Bitmain has been hit with a significant tax penalty for reportedly violating tax regulations in China. According to local news agency Sina Finance, the Beijing Municipal Office of the State Administration of Taxation has imposed a fine of approximately 25 million Chinese yuan ($3.7 million) on Bitmain Technologies. The information comes from China’s data registry of private and public companies, Qichacha, and states that the penalty was issued on April 4, 2023.
Bitmain allegedly failed to comply with China’s laws on tax administration, specifically in relation to the payment of personal income taxes. The violations reportedly involve taxes on income from employee salaries, bonuses, labor dividends, allowances, and more. The tax authority noted that tax inspectors delivered notice of these violations to Bitmain in August 2022. As of now, Bitmain’s Beijing unit has not paid personal income tax totaling 16.6 million yuan, or $2.4 million.
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Bitmain’s Background and Continued Success
Founded in 2013, Bitmain is among the largest cryptocurrency mining companies globally, known for producing crypto mining-specific hardware and solutions. In response to a blanket ban on cryptocurrency imposed by the Chinese government in September 2021, Bitmain was reportedly forced to halt its business in China in October 2021. How the company has continued its operations since then remains unclear, and Bitmain has not yet responded to requests for comment.
Despite regulatory uncertainty and a major downturn in the crypto market in 2022, Bitmain’s business has persevered. In December 2022, the company’s latest Antminer device sold out in less than a minute, even amid plummeting mining profitability.
Support for the Mining Industry
In September 2022, Bitmain founder Jihan Wu established a $250 million fund to assist the mining industry impacted by the prolonged cryptocurrency winter. After departing Bitmain in 2021, Wu founded Bitdeer, a new crypto mining company and a spin-off of Bitmain.
Bitmain’s recent tax penalty highlights the ongoing regulatory challenges faced by cryptocurrency companies in China. However, the company’s continued success suggests that demand for crypto mining hardware remains strong, despite regulatory hurdles and a bearish market.
