A major polysilicon producer in Xinjiang has been fined over 100 million yuan for illegally supplying electricity to Bitcoin mining operations.
In addition to the fine, the authorities have confiscated polysilicon illegal gains. This move shows that regulators are no longer tolerating companies acting as middlemen in the electricity supply chain for miners.
Why Xinjiang Plans to Cut Out Crypto Mining
Typically, Xinjiang is rich in energy, with massive wind, solar, and thermal power capacity. Local industries often cannot make use of all the electricity, leading to curtailment, where electricity is wasted.
Miners, on the other hand, do not have access to cheap electricity directly. They rely on intermediaries like polysilicon plants, aluminum smelters, and self-owned power stations.
These companies would sell electricity at industrial rates to miners, pocketing the difference. The practice created a gray market, which is basically similar to a supermarket secretly running an illegal business in its backyard.
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In 2025, Xinjiang authorities held a special meeting on digital asset mining, following the national guidelines from the People’s Bank of China and other key regulatory bodies.
Xinjiang officials discussing digital assets, Source: mp.wiexen.qq
Local branches of the Public Security Department, financial regulators, and the Cyberspace Administration have since then been working together to collect evidence, investigate cases, and monitor energy usage. Cities such as Urumqi, Changji, Karamay, and Hotan reported suspicious electricity usage, and the agencies took action.
At the same time, due to the electricity demand from high-end manufacturing and green hydrogen, any electricity taken by mining operations now directly reduces resources for legitimate industries.
The fine of over 100 million yuan is more than a punishment for just one company. According to the local news outlet, it marks the end of cryptocurrency mining in Xinjiang as the region is transforming back into an energy hub for legitimate industry, rather than a hotspot for miners who are chasing after cheap electricity.
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