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Hungary’s central bank chief wants EU-wide crypto trading and mining ban

Hungary’s central bank chief wants EU-wide crypto trading and mining ban

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György Matolcsy, Governor of the Hungarian National Bank, has proposed a blanket ban on all cryptocurrency trading and mining operations across the European Union. 

Governor Matolcsy cited the recent crypto ban imposed by China in a blog post shared by the Hungarian central bank a.k.a. Magyar Nemzeti Bank (MNB) titled “Time has come to ban crypto trading and mining in the EU.”

He also pointed out the Russian central bank’s proposal that calls for a blanket ban on domestic cryptocurrency trading and mining. Reciprocating the proposals for a crypto ban, Matolcsy said:

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“I perfectly agree with the proposal and also support the senior EU financial regulator’s point that the EU should ban the mining method used to produce most new bitcoin.”
The governor strongly believes in cryptocurrency’s potential to “service illegal activities and tend to build up financial pyramids.” Matolcsy also highlighted concerns raised by the Russian central bank — that the market value in crypto is determined by the “speculative demand for future growth, which creates bubbles.”

On an end note, governor Matolcsy calls for an outright blanket ban on cryptocurrencies to counter the investor’s risks related to financial pyramids and bubbles:

“EU citizens and companies would be allowed to own cryptocurrencies abroad and regulators will track their holdings.”

On Sept 2021, a bronze statue of legendary Bitcoin (BTC) creator Satoshi Nakamoto was unveiled in Graphisoft Park in Budapest, Hungary.

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Satoshi statue unveiled today in Budapest. Love how it is reflective, underlining how we all play a role in Bitcoin.

May it inspire all those fighting against authoritarianism worldwide, including dissidents and journalists being persecuted by Viktor Orbán in Hungary. pic.twitter.com/kEOaDt4ahi

— Alex Gladstein ⚡ (@gladstein) September 16, 2021
As Cointelegraph reported at the time, the sculpture shows the upper half of a figure with a featureless face wearing a hoodie with the BTC logo. Debreczeni Barnabás, the CEO of Hungarian crypto exchange Shinrai was among the numerous crypto entrepreneurs who spoke at the ceremony:

“Satoshi Nakamoto has created an independent money free of any middlemen that empowered people with financial sovereignty […] We have erected this statue to remind ourselves courage is virtue. We need to keep on dreaming big.”

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Butyrka

Crypto Mining Farm Uncovered In Russia’s Oldest Prison

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Crypto Mining Farm Uncovered In Russia’s Oldest Prison

Russian law enforcement officials are investigating a crypto mining operation at Butyrka, Russia’s oldest prison. A deputy warden has been accused of stealing electricity to mint digital coins with the help of unidentified accomplices.

Deputy Warden Suspected of Mining Cryptocurrency in Moscow Prison

A high-ranking representative of the management of Butyrskaya prison, in the Tverskoy District of central Moscow, is under investigation for setting up a crypto mining farm. Also known as Butyrka, this is the oldest prison in Russia, built in the distant 1771.

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The coin minting hardware was found in the premises of a psychiatric clinic run by the Federal Penitentiary Service at the prison. The Investigative Committee of the Russian Federation is currently checking one of the deputy wardens for possible abuse of power, the business daily Kommersant reported this week.

The investigators have so far established that the official, together with his accomplices who are yet to be identified, installed the mining equipment in November 2021. The rigs were extracting cryptocurrency until February of this year.

During that period, the machines consumed almost 8,400 kW of electricity paid by the government at a total cost of more than 62,000 rubles (close to $1,000). For this, the deputy warden is accused of “actions that clearly go beyond his powers, thereby significantly violating the legally protected interests of the society or the state.”

Crypto mining with subsidized and sometimes stolen electricity has become an attractive source of additional income for many Russians. Regions such as Krasnoyarsk Krai and Irkutsk Oblast, which have historically maintained low electricity rates for the population and public institutions, have become hotspots of the unauthorized activity.

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Illegal miners have been blamed for frequent breakdowns and blackouts, particularly in residential areas where electrical grids are unable to handle the excessive loads. To deal with the phenomenon, Russia’s anti-monopoly agency recently proposed the introduction of higher electricity rates for home crypto miners.

Raids have been carried out against underground mining operations across the country, with law enforcement agencies recently seizing over 1,500 mining rigs from two illegal cryptocurrency farms in Dagestan. One of them was minting cryptocurrency at a pumping station of the Russian republic’s water supply utility.

Tags in this story

Butyrka, Butyrskaya prison, Crypto, crypto farm, crypto miners, crypto mining, Cryptocurrencies, Cryptocurrency, illegal, Miners, mining, Moscow, penitentiary, prison, Russia, russian, warden

What do you think will happen with the Russian prison official accused of illegal crypto mining? Tell us in the comments section below.

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Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Abkhaz

Despite Criminalizing Mining, Abkhazia Uncovers Another Crypto Farm

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Despite Criminalizing Mining, Abkhazia Uncovers Another Crypto Farm

Even after introducing fines and criminal liability for cryptocurrency mining, Abkhazia continues to find underground facilities for digital currency extraction. This week, law enforcement officials have confiscated dozens of mining devices from an illegal crypto farm.

Abkhazia Shuts Down Crypto Farm, Seizes Mining Hardware

Police in Abkhazia have closed down another crypto mining installation in a rural area of the breakaway Georgian republic. The illegal coin minting facility was located in the village of Yashtuha, Sukhumi region, the Ministry of Internal Affairs announced.

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Representatives of the interior ministry, together with officials from the Department for Energy Supervision and other government agencies, raided the cryptocurrency farm on Wednesday, May 16, acting on a tip-off.

An administrative protocol has been drawn up against the miner, 29-year-old local resident Khanchalyan Robertovich. He operated 31 mining machines that have been confiscated and transferred to a government-owned warehouse.

In the past few years, many Abkhazians have turned to crypto mining as an alternative source of income. The government of the partially recognized republic in the South Caucasus has blamed the energy-intensive process for the territory’s growing electricity deficit.

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To deal with the power shortages, the Russia-backed de facto state imposed a temporary ban on crypto mining and hardware imports in 2018. Last year, the measure was extended until March 31, 2022 and then in April, prolonged until the end of this year.

Authorities in Sukhumi also introduced hefty fines and criminal liability for illegal use of electricity to produce cryptocurrencies. Mining is believed to be the main cause for the frequent breakdowns of the republic’s power distribution network.

Officials in Sukhumi have since admitted that their efforts to curb crypto mining have largely failed. Reports revealed last summer that Abkhazia had held talks with Russia in an attempt to solve its issues with electricity supply. At the time, the government was also planning to regulate the activity and ensure that miners are legally connected to the grid.

Tags in this story

Abkhaz, Abkhazia, Abkhazian, Abkhazians, ban, confiscated, Crypto, crypto farm, crypto miners, crypto mining, Cryptocurrencies, Cryptocurrency, deficit, Electricity, Miners, mining, Mining Devices, Mining Farm, mining machines, power, seized, shortages

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Do you expect Abkhazia to legalize cryptocurrency mining once it overcomes its electricity shortages? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bitcoin mining

U.S. Mining Stocks Drop Almost 50% Despite Hashrate Increasing

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U.S. Mining Stocks Drop Almost 50% Despite Hashrate Increasing

The Cambridge Center for Alternative Finance, a financial research institute affiliated with Cambridge University, has found that the Bitcoin hashrate was up by 4% in August from the previous year, from 35% to 39%. But, still, the mining stocks have seen declines in the last month, with Bitcoin prices going down. The concluded figure involves BTC.com, Via BTC, and Pooling data.

Cryptocurrency mining involves verifying and broadcasting the transactions on the relative blockchain ledger. It is a computationally-intensive process that opens doors for validators (who validate transactions) to earn rewards. Validators verify the transaction by guessing a unique hash number associated with each transaction. And it requires computing power more than simple PCs.

Related Reading | New Data Shows China Still Controls 21% Of The Global Bitcoin Mining Hashrate

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Similarly, it needs a more powerful computer when verifying transactions on the Bitcoin network. Because the Bitcoin algorithm creates difficulty when too many validators come online simultaneously.

Mining Bitcoin through a home computer was feasible a decade ago. However, considering the problems that arose with the growth of BTC mining, U.S. public companies such as Marathon Digital Holdings, Riot Blockchain, and Core Scientific owned server forms have made this type of work more accessible.

Bitcoin is currently trading below $29,000 | Source: BTC/USD price chart from Tradingview.com

Mining Stocks Dropped Nearly 50%

The most recent bloodbath in the crypto market, which has seen the collapse of TerraUSD and the price dips of many cryptocurrencies, also caused a slump in the price of the shares of these mining companies.

Since April 18, mining stocks of Core Scientific and Marathon have nearly lost 47% of their value. Likewise, Riot’s shares are reduced by its one-half, and Canadian-based Hut 8 Mining Corp has similarly diminished by 41% of the value of its shares.

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A few crypto traders point out that seeing the last month’s decline of 25% in Bitcoin price and the increasing correlation of crypto with the stock market, investors would now be cautious about cryptocurrency investment.

The level of correlation between crypto and stocks has lasted between 0.67 to 0.78, with the BTC falling 10% on the day of peak correlation. Here 0 refers to no relationship, and 1 implies being completely correlated.

Richard Craib, chief of the San-Francisco-based hedge fund Numerai, stated that digital assets are now “part of the mainstream financial system, and that’s not good for its viability as an alternative asset class. It’s not serving its original purpose as an uncorrelated asset.” 

Related Reading | Bitcoin Bearish Signal: Whales Ramp Up Dumping

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Analysts say that some traditional investors have ended up their crypto trading. The plummet of tech stocks has become the reason behind the exit of many investors. So they are selling their virtual assets to raise funds. 

In addition, the raised concerns about the environmental impacts of mining could also play their role in dropping stock prices. As of now, 160 crypto mining bills are waiting for the consideration of the government authorities in over 30 states.

Featured image from Pixabay and chart from TradingView.com

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