The New York Times (NYT) reports that Bitcoin mining operations owned by Chinese entities in the United States are currently under investigation for potential national security threats. The scrutiny began when a Chinese company started building a cryptocurrency mining facility in Cheyenne, Wyoming. Last year, Microsoft’s national security experts raised concerns about the facility’s proximity to a Microsoft data center serving the Pentagon and an Air Force base overseeing nuclear-armed intercontinental ballistic missiles. These experts warned that the location could enable the Chinese to conduct intelligence collection operations.
The mining facilities, which consist of large warehouses or containers housing specialized computers, also put significant strain on the local power infrastructure. Legal documents reveal that the Cheyenne mining operation is associated with five companies sharing the same office address in Manhattan, with one entity registered in the Cayman Islands and previously involved in the Chinese pork processing industry. However, the president of Bit Origin Ltd., the former pork processor turned Bitcoin miner, refuted claims of security threats and stated that the site was chosen due to an agreement with the local utility company for power supply.
The NYT has identified Chinese-owned or operated Bitcoin mining operations in at least 12 states, consuming as much energy as 1.5 million households. While some US mining operations seem straightforward, the ownership of others remains unclear and can be traced back to the Chinese government. Import records reveal that Bitmain, a leading Bitcoin mining equipment manufacturer, increased its shipments to the US after the ban on Bitcoin mining in China in 2021. The NYT also noted that the company’s equipment shipments to the US have significantly increased in the past five years, with some shipments sent through a subsidiary affiliated with the Communist Party in southern China.
Chinese Bitcoin mines in the United States raise serious national security concerns, as they pose a risk to the security and integrity of the cryptocurrency network. The environmental impact and competition for renewable energy sources are additional pressing issues. A recent publication from the Office of the Director of National Intelligence warns that China may engage in assertive cyber actions, targeting critical infrastructure in the United States, in the event of a significant conflict with the US.
