Due to its low electricity costs, Angola, an African country, has attracted a large number of Chinese miners. However, Angola recently passed legislation that prohibits cryptocurrency mining, which came into effect on April 10th. According to the law, cryptocurrency mining is considered a criminal activity, and individuals who engage in mining activities for cryptocurrencies and other virtual assets, 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 mining. However, the Chinese Embassy in Angola recently issued a warning stating that the “Prohibition of Cryptocurrency and Other Virtual Asset Mining Law” in Angola has officially taken effect, and mining for cryptocurrencies is now considered a criminal offense. Possession of information, communication, and infrastructure equipment used for mining virtual currencies can lead to imprisonment for 1 to 5 years, along with confiscation of the related equipment.
Engaging in cryptocurrency and other virtual asset mining individually or through others, or connecting mining equipment to the national power system, can result in a prison sentence of 3 to 12 years. Those who use power facilities for cryptocurrency mining activities may face imprisonment for 3 to 8 years.
The Chinese Embassy in Angola emphasized the two main hazards of mining. Firstly, it consumes a significant amount of energy and has a large carbon footprint, which can affect industrial electricity usage and the stability and security of the national power system. This can harm public interests, hinder socio-economic development, and be detrimental to energy conservation and emission reduction efforts. Secondly, the production and trading of virtual currencies have anonymity and are not limited by geographical boundaries, making it difficult to monitor fund flows. This can easily disrupt economic and financial order, leading to illegal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering.
China has already completely banned cryptocurrency trading and has stipulated that “cryptocurrencies do not have the same legal status as fiat currencies.” Engaging in activities related to virtual currencies is considered illegal financial behavior. The Chinese Embassy in Angola pointed out that the Angolan government is also cracking down on this issue. Several Chinese citizens in Angola have faced legal consequences in recent years for engaging in cryptocurrency mining and illegal electricity usage.
Despite Angola’s ban on cryptocurrency mining, miners are actively seeking countries with low electricity costs. For example, Ethiopia has become a preferred destination for mining, as it has approved mining-friendly laws in 2022. In addition, Paraguay initially sought to impose a ban on mining but later changed its mind and considered selling excess electricity from its hydroelectric power stations to miners to generate more revenue for the national power management authority.