Angola, an African country, has attracted a large number of Chinese miners due to its cheap electricity costs. However, Angola recently passed legislation to ban cryptocurrency mining, which came into effect on April 10th. According to the law, cryptocurrency mining is considered a criminal offense, and individuals who engage in mining activities, either by themselves or through others, will be sentenced to 3 to 12 years in prison.
Angola, with its abundant hydro resources and low electricity costs, has become a popular destination for Chinese miners, as China has already banned cryptocurrency mining. However, in February of this year, the Angolan parliament passed legislation to criminalize cryptocurrency mining in order to safeguard national energy security.
The Chinese Embassy in Angola recently issued a warning, stating that Angola’s “Law Prohibiting Cryptocurrency and Other Virtual Asset Mining” officially came into effect on April 10th. The law stipulates that cryptocurrency mining is a criminal act, and individuals who possess information, communication, and infrastructure equipment used for virtual currency mining activities will be sentenced to 1 to 5 years in prison, and their equipment will be confiscated.
Individuals who engage in cryptocurrency and other virtual asset mining, either by themselves or through others, or connect mining equipment to the national power system, will be sentenced to 3 to 12 years in prison. Those who use power facility permits for cryptocurrency mining activities will face 3 to 8 years of imprisonment.
The Chinese Embassy in Angola stated that mining has two main hazards. Firstly, it consumes a large amount of energy and generates significant carbon emissions, which can affect industrial electricity usage and the stability of the national power system. This damages public interests, hinders socio-economic development, and is detrimental to energy conservation and emissions reduction efforts.
Secondly, due to the anonymity and lack of geographical restrictions in cryptocurrency production and transactions, the flow of funds is difficult to monitor, making it susceptible to disrupting economic and financial order and fostering illegal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering.
China has already banned cryptocurrency trading comprehensively and stipulated that “cryptocurrencies do not have the same legal status as fiat currencies.” Engaging in cryptocurrency-related businesses is considered illegal financial activities. The Chinese Embassy in Angola pointed out that the Angolan government has also taken strict measures against this. Since last year, several Chinese citizens in Angola have been held legally responsible for illegal electricity usage in cryptocurrency mining.
While Angola has banned cryptocurrency mining, other countries with low electricity costs are actively welcoming miners. For example, Ethiopia has become a preferred mining destination and has approved mining-friendly laws in 2022. Initially, Paraguayan lawmakers sought to impose a ban on mining, but they later changed their minds and considered selling surplus electricity from the country’s hydroelectric power plants to miners to generate more revenue for the National Electricity Administration.
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