President Biden on Monday ordered a Chinese-origin company to close and sell a crypto mine in Wyoming it built a mile from an Air Force base that controls nuclear-capable intercontinental ballistic missiles.
The cryptomining facility, which operates high-performance computers in a data center near F.E. Warren Base in Cheyenne, “poses a national security risk to the United States” because its equipment could be used for surveillance. the President said in an executive order. and espionage.
Last October, the New York Times reported that Microsoft, which operates a nearby data center that supports the Department of Defense, reported China-related cryptocurrency mines to the Committee on Foreign Investment in the United States, allowing China to “pursue” them. It was reported that the company had warned that it could result in A full range of information gathering activities. ” According to the executive order, the commission's investigation identified risks to national security.
The order does not detail these risks. However, Microsoft's report to a federal commission obtained by the Times last year states: The data center and one of the three strategic missile bases in the United States provide a significant threat vector. ”
According to the order, the mine must immediately cease operations, the owner must remove all equipment within 90 days, sell or transfer the assets within 120 days, and the mine must remove “foreign” mines from the facility. It cites equipment risks. The majority of the machinery powering cryptomining operations across the United States is manufactured by Chinese companies.
Cryptomining operations typically run 24 hours a day in large warehouses or shipping containers packed with dedicated computers that perform trillions of calculations per second to mine sequences of numbers that reward new cryptocurrencies. will be stored within. The most common is Bitcoin, which is currently worth more than $60,000 each. Cryptocurrency mining consumes enormous amounts of electricity. At full capacity, the mine in Cheyenne would consume as much as 55,000 homes.
Chinese-owned cryptocurrency mining facilities have been booming in the United States since they were effectively banned in China in 2021. Some crypto mining has since resumed in China, but Chinese crypto entrepreneurs are drawn to the United States, where electricity is cheaper and laws are better. system.
The newspaper reports that there are Chinese-owned or Chinese-operated Bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas, and Wyoming, which together provide enough power to power 1.5 million homes. I discovered that I am using it. Some are owned by individuals and companies with ties to the Chinese government and Communist Party. Until recently, the Times said, the main supplier of mining equipment operated out of an office inside a Communist Party compound on Hainan Island.
President Biden's order comes after he signed a bipartisan bill banning social media app TikTok in the United States unless it is sold by Chinese owners.
It is also the second time in recent weeks that a Chinese-owned cryptomining operation has been targeted by elected officials.
This month, Arkansas Republican Governor Sarah Huckabee Sanders signed two laws restricting foreign ownership of cryptomining operations in the state. The law prohibits the ownership of virtual currency mines by foreign nationals from China, Iran, Cuba, and other countries subject to State Department regulations known as the International Traffic in Arms Regulations.
Arkansas has seen a large influx of Bitcoin mining operations in recent years. In October, the Times reported that Chinese investors with ties to the authoritarian government were operating at least three mines in Arkansas. A former employee involved in the operation wrote that the company searched “more than 200 targeted mines” in more than 10 states.
A law restricting the ownership of cryptomining operations in Arkansas aims to amend last year's so-called “mining rights law,” which provides broad protection to the industry by limiting local regulations, allowing businesses near mines to This caused a fierce backlash among the residents. One of them has Chinese ties and is the subject of a lawsuit by residents who say the constant noise from thousands of fans cooling computers has ruined their lives and reduced property values. There is. In addition to new restrictions on noisy operations, the revised law requires foreign-owned cryptocurrency mines subject to arms regulations to be fully divested within one year.
Biden's order is directed at an offshore company called MineOne Partners Limited and related MineOne entities registered in Delaware. A lawsuit filed by a Wyoming cryptocurrency company against MineOne forces the company to disclose its owners, including Chinese nationals. In 2022, Bit Origin Ltd., a former Chinese pork producer that pivoted to crypto mining, partnered with the MineOne entity to build the mine, which began operations in early 2023.
Bit Origin President Li Jiaming could not be reached for comment. In an interview last year, Mr. Lee said investors chose the site not because of its proximity to bases or data centers, but because it had a power contract with a local power company.
