Chinese-owned Bitcoin mining operations in the United States are currently being investigated for potential national security threats, according to the New York Times (NYT). The scrutiny began last year when a Chinese company started building a cryptocurrency mining facility in Cheyenne, Wyoming.
National security experts at Microsoft 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. The experts highlighted that the location could potentially enable the Chinese to conduct comprehensive intelligence collection operations.
In addition to intelligence concerns, these mining facilities, which consist of large warehouses or containers housing specialized computers, also put significant pressure on the local power infrastructure. The Cheyenne mining operation is associated with five companies, all registered at the same address in Manhattan. One of these entities was previously involved in the Chinese pork processing industry.
However, Li Jiaming, the president of Bit Origin Ltd., the former pork processor turned Bitcoin miner, denied any claims of security threats. Jiaming stated that the site was chosen because of the agreement with the local utility company to provide power, rather than seeking proximity to the Microsoft data center or the missile base. He emphasized the importance of a reliable power supply for their business.
The NYT has identified Chinese-owned or operated Bitcoin mining operations in at least 12 states across the United States. These mining facilities collectively consume as much energy as 1.5 million households. While some operations appear transparent, the ownership of others remains obscure, with several tracing back to the Chinese government.
After the ban on Bitcoin mining in China in 2021, Bitmain increased its equipment shipments to the United States. Import records indicate that some shipments were sent to the US via a subsidiary at a site affiliated with the Communist Party in southern China. The company’s equipment shipments to the US have increased significantly in the past five years.
Chinese Bitcoin mines in the United States raise serious national security concerns. The potential for foreign influence and control over these mining facilities poses a significant risk to the security and integrity of the cryptocurrency network. The environmental impact and competition for renewable energy sources are also pressing issues.
A recent publication from the Office of the Director of National Intelligence cautioned that China would likely engage in assertive cyber actions in the event of a significant conflict with the United States, targeting critical infrastructure within the country.
It is essential to carefully monitor and assess the operations of Chinese-owned Bitcoin mining facilities in the United States to ensure the protection of national security interests. Collaborative efforts between government agencies, cybersecurity experts, and the cryptocurrency industry are necessary to address these concerns effectively.