Microsoft bans cryptocurrency mining on cloud services

Microsoft now requires users to obtain a written pre-approval from the firm in order to use Microsoft Azure for mining cryptocurrencies like Bitcoin.

Cloud computing giant Microsoft is taking measures to increase stability of its cloud services by forcing new restrictions for activities like cryptocurrency mining.

Microsoft has quietly banned crypto mining from its online services in order to better protect its customers and clouds, British technology news agency The Register reported on Dec. 15.

The company introduced the new restrictions as part of its universal license terms of Microsoft Online Services. Microsoft updated its acceptable use policy on Dec. 1 to clarify that “mining cryptocurrency is prohibited without prior Microsoft approval.”

In the “Acceptable Use Policy” section, Microsoft said that it now requires users to obtain a written pre-approval from the company in order to use any of Microsoft Online Services for crypto mining.

Microsoft reportedly said that its latest crypto mining restrictions aim to protect the online services from risks like cyber fraud, attacks and unauthorized access to customer resources, stating:

“We made this change to further protect our customers and mitigate the risk of disrupting or impairing services in the Microsoft Cloud.”

The firm also reportedly noted that it may consider permission to mine crypto for testing and research purposes for security detections.

Microsoft did not immediately respond to Cointelegraph’s request for comment.

Microsoft Online Services is Microsoft’s hosted-software offering and is a component of the firm’s software as a service strategy. These services include Microsoft’s Azure cloud computing network, which is known to offer cryptocurrency mining on certain subscription types. As previously reported, Microsoft also experimented with blockchain services on Azure, but quietly terminated its Azure Blockchain Service project in September last year.

According to some reports, Microsoft cloud computing systems have suffered notable capacity shortages in recent years due to continuing supply-chain limitations. More than half a dozen Azure data centers are reportedly expected to remain limited until early 2023.

By adopting the new restrictions, Microsoft joins many other cloud computing providers, including Google, which also prohibits customers from engaging in cryptocurrency mining without Google’s prior written approval. Other platforms like Oracle have banned cloud mining completely, while Digital Ocean also requires written permission.

Related: Nasdaq warns Bitcoin mining firm Bitfarms about share price deficiency

Cloud mining is an alternative method of investing in crypto allowing users to mine digital coins without using mining equipment or hardware, relying on a remote datacenter with shared processing power. According to the blockchain research group Blockchain Council, cloud mining is one of the most profitable ways to mine crypto because it doesn’t require customers to pay for the equipment and related costs.

The news comes amid the cryptocurrency mining industry going through a major crisis linked to the current cryptocurrency winter, with some miners being on the edge of bankruptcy due to insufficient funds.