The majority of the bank accepts that mining for cryptocurrency are illegal because they are not issued by any recognized currency institution and do not have any officially authorized status that can make them equivalent to currencies. Therefore, it is recommended not to circulate them as currency. Therefore, mining Bitcoin is illegal.
However, the practical significance of the ban is still uncertain, and they are unlikely to completely effectively eliminate cryptocurrency transactions. China has a large number of Bitcoin mining farms because many regions provide cheap, subsidized electricity, making mining a profitable risk.
Many people agree that the Chinese authorities’ ban will have a negative impact on the entire digital currency market.
Cloud mining refers to the use of contracts instead of equipment to provide computing power to mine Bitcoin and other proof-of-work (PoW) tokens. Buyers can directly sign a cloud mining contract to rent the computing power provided by the platform machine to mine for themselves. The expansion of wealth and the lack of supervision have caused cloud mining to become a new round of relatively hot alternative investment methods for a period of time.
Due to the high requirements for hardware equipment in individual mining, the long recovery period of funds, it is difficult for ordinary people to enter, and the skyrocketing of virtual currency has long been out of the circle, and the cost is actually in front of everyone. When there is demand, there will be a market, and the cloud mining model will come into being.
The criminal risk of cloud mining platforms is relatively easy to touch is the crime of illegal fund-raising. In essence, the investment business of cloud mining mainly uses the positive trend of rising bitcoin value and the certain current degree of value preservation of high-end graphics cards or mining machines to attract public funds. The platform often launches various schemes, subscribing and leasing designated mining machines to obtain the corresponding computing power.
The grow of virtual currencies such as Bitcoin has given investors plenty of room for imagination and has also allowed the platform to dare to promise high returns. The concept of decentralized currency has also given birth to a large number of other virtual currencies based on Bitcoin’s source code, claiming to be stable and not falling to attract investment. However, the essence of cloud mining is computing power rental.
However, if the mining platform does not specify a mining pool and can only check the computing power on its platform, it is very likely to evolve into an over-issued computing power or a pure capital disk. Without supervision, if things go on like this, it is likely to evolve into a Ponzi scheme of borrowing the new to repay the old. If Bitcoin and other virtual currencies fall sharply, it is very easy for the mining pool operators to make ends meet, and ultimately it is difficult to redeem investors.
The use of fraudulent methods to raise funds illegally under any of the following circumstances can be determined as “for the purpose of illegal possession”:
- The raised funds are not used for production and business activities or are obviously out of proportion to the scale of the raised funds so that the funds raised cannot be returned;
- Unwillingly squander the fund-raising funds so that the fund-raising funds cannot be returned;
- Escaping and hiding with the funds raised;
- Using the funds raised for illegal and criminal activities;
- Fleeing, transferring funds, concealing property, and evading return of funds;
- Concealing or destroying accounts, or committing false bankruptcies or bankruptcies, evading the return of funds;
- Refusing to explain the whereabouts of the funds and evading the return of funds;
- Other circumstances under which the purpose of illegal possession can be determined.
The mining of bitcoin in some countries is legal and not legal in some countries. All virtual currencies like bitcoin and others are against banking rules. Transaction of bitcoin is impossible to trace.