According to an October 13 report from the New York Times, US government officials were allegedly monitoring certain cryptocurrency mining operations with ties to China.
In a recent report, The New York Times uncovered alleged national security concerns surrounding Chinese-owned Bitcoin (BTC) mining operations on US soil.
Attention is focused on a crypto mining facility in Cheyenne, Wyoming, that raised alarm bells due to its proximity to a Microsoft data center that supports the Pentagon and an Air Force base responsible for nuclear-armed intercontinental ballistic missiles.
Growing Presence of Chinese Bitcoin Mines in the US
According to the report, Microsoft’s national security threat assessment team expressed deep concern about the potential for “full spectrum intelligence gathering operations” that the Chinese company could conduct in such a strategic location.
Following Microsoft’s warning, US government officials anonymously said they had been monitoring the Wyoming mining operation for months. Steps were taken to mitigate potential intelligence gathering, but no details were provided. The mining company collaborated with the investigations of the federal investment committee.
This Wyoming case sheds light on a broader trend of increasing Chinese Bitcoin mines across the United States, causing concern and raising additional security concerns. Beyond concerns about intelligence gathering, these mining operations, which consist of large warehouses or containers packed with specialized computers, put significant pressure on power grids.
Mining computers run continuously and consume large amounts of electricity while “mining” digital currencies, particularly Bitcoin. Brian Harrell, former undersecretary for infrastructure protection at the Department of Homeland Security, warned that if these mines collaborated to wreak havoc, they could place “enormous stress” on the network, potentially leading to targeted blackouts or cyberattacks.
Harrell emphasized that any Chinese infrastructure that affects key energy systems should prompt further investigation and scrutiny. The New York Times investigation identified Chinese-owned or operated Bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas and Wyoming.
Together, these mines consume as much energy as 1.5 million homes. When operating at full capacity, the Cheyenne, Wyoming, mine alone requires enough electricity to power 55,000 homes.
Controversy Surrounds Bitmain
Many of these mining facilities use computers manufactured by Bitmain, a Chinese company with no apparent direct connection to Chinese authorities. However, import records indicate that Bitmain has sent shipments to the United States through a subsidiary at a Communist Party site in southern China.
Since China banned Bitcoin mining in May 2021 due to concerns over energy use and economic destabilization, Bitmain has increased its equipment shipments to the United States fifteenfold compared to the previous five years.
According to the New York Times, the company claims to control 90 percent of the global Bitcoin mining equipment market. Overall, according to the report, the rise of Chinese-owned Bitcoin mining operations in the United States has raised significant national security and energy infrastructure concerns for US authorities.
On October 3, the Treasury Department sanctioned cryptocurrency wallets allegedly linked to the production of the drug fentanyl, which included several China-based chemical manufacturers. In July, claims that cryptocurrency company Prometheum had ties to the Chinese government sparked calls for an investigation by six members of Congress.
The price of BTC stands at $26,700. Over the past seven days, the market’s largest cryptocurrency has seen sideways price movement following the loss of the crucial $27,000 psychological level for bullish investors. During this period, BTC recorded a drop of 3.4%.
By Leonardo Pérez
