Bitmain Fined About $3.7 Million for Tax Violations in China
The Chinese tax authority claim Bitmain was issued with a tax violations notice in August last year but has withheld paying individual tax income of about $2.4 million.
Bitmain Technologies Ltd., a Beijing-based company that is well known for designing application-specific integrated circuit (ASIC) chips used in Bitcoin mining, has reportedly been fined approximately 25 million Chinese yuan, equal to about $3.7 million, for allegedly failing to pay personal income taxes in China. Reportedly, Bitmain disregarded the Chinese taxation laws on the administration of tax collection in reporting income tax on its employees.
According to a local news media outlet Sina Finance, Bitmain was penalized on April 4, 2023. Bitmain is accused of violating tax regulations in China in regard to employees’ salaries, bonuses, labor dividends, and allowances, among others. Additionally, the Chinese taxman claims Bitmain was issued with a notice on certain tax violations in August last year. In this regard, Bitmain is accused of withholding individual income tax amounting to about $2.4 million.
Bitmain and Crypto Operations in China
Founded in 2013 by Micree Zhan and Jihan Wu, Bitmain has several crypto mining brands including AntMiner, AntPool, and Hashnest. The company is one of the largest Bitcoin network supporters through its BTC.com and AntPool which are considered to be the largest mining pools in the industry. Interestingly, the company has been profitable since 2018, whereby Bitmain reported a net profit of about $742.7 million in the first half of that year.
As a result, the company’s operations remain largely unaffected by a $3.7 tax fine by the Chinese authorities. Moreover, the demand for its crypto mining remains high amid global crypto adoption through mainstream markets.
Meanwhile, cryptocurrency operations in China are officially illegal after several bans initiated by the government. Back in 2017, China banned cryptocurrency exchanges and initial coin offerings (ICOs). Two years later, the country banned Bitcoin mining activities, which resulted in a migration of miners to Western Asia and the United States. In subsequent years, China has intensified its ban on crypto trading and mining activities.
Nevertheless, the tables could soon be turning for the crypto industry in China as the banking industry in the country looks to invest in the digital assets market through Hong Kong-based startups. Additionally, crypto prices have begun being projected on Douyin, the Chinese version of TikTok.
#Bitcoin price is now live on Douyin 抖音 （@tiktok_us in China） pic.twitter.com/sgvdn70LQr
— H.E. Justin Sun 孙宇晨 (@justinsuntron) April 10, 2023
These moves coincide with the Bitcoin price rally in 2023 that has yielded over 81 percent. Additionally, the reports of a global recession fueled by increased inflation have seen Chinese authorities rethink their approach to crypto assets. Moreover, Chinese crypto traders are reportedly using unorthodox methods to access centralized exchanges like Binance including using VPNs and fake documentation to bypass the KYC features.
next
Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology.
Let us all WIN!
