US Bitcoin mining company CleanSpark (CLSK) has become embroiled in a political war between the US and China after purchasing a mining site in Wyoming, close to a US nuclear missile base, from MineOne, a company with ties to China.
President Joe Biden on Monday ordered a Bitcoin mining facility near Warren Air Force Base in Wyoming to cease operations, saying it uses foreign-derived technology and poses a threat to national security. The order states that Mine One is majority-owned by the Chinese and that all mining equipment on site must be removed from within one mile of a military facility in Cheyenne that houses Minuteman III intercontinental ballistic missiles (ICBMs). It is said that it will not happen.
While this may not be a surprising move in itself, the timing is remarkable since MineOne sold the site to CleanSpark less than a week before the order was placed.
On May 9, CleanSpark announced the purchase of two mines for approximately $19 million in cash for a 45-day term, without disclosing the specific sellers. The miner said it will deploy the latest generation of mining machines from China-based Bitmain and plans to expand the site by an additional 55 megawatts (MW) from 75MW.
A CleanSpark spokesperson said the company was not aware of the order before purchasing the mine site, but acknowledges the executive order's concerns and intends to move forward with the transaction.
“While both the executive order and CFIUS’ involvement were unknown to us prior to signing the contract and added an unexpected element to the closing process, we are committed to working through these developments toward a satisfactory closing. ,” a spokesperson told CoinDesk. statement.
“We respect the oversight process and are committed to ensuring that our operations strengthen national security and benefit economic development, especially in Wyoming, which is at the forefront of developing and fostering a pro-Bitcoin environment.” mentioned in.
Neither MineOne nor the Loeb & Loeb attorney who handled the company's real estate transaction responded to requests for comment.
However, the details of the $19 million transaction are detailed in CleanSpark's filing with the Securities and Exchange Commission (SEC). This acquisition was highly dependent on securing the large amounts of energy needed to operate the business.
The larger of the two facilities is approximately 4,000 feet from the nearest edge of Warren Air Force Base.
The sale agreement from MineOne was signed by Jiaming Li, the company's director. CoinDesk could not be reached for comment, but Li was also the president of China Xiangtai Foods, a partner of TCC Capital, and reportedly managed approximately $12 billion in assets at Sinatai Insurance.
He holds a doctorate in economics from Fordham University, according to a previous press release. Mr. Lee is an investor in MineOne and also briefly served as president of Bit Origin Ltd., a company previously reported to have been subject to similar scrutiny from Washington.
The contract with CleanSpark disclosed by the SEC outlines a 15-day due diligence period starting May 8, the contract signing date, and states that MineOne agreed to meet several conditions, including “government compliance matters.” If not, the acquisition may be scrapped.
“I have been deeply involved in national security issues for nearly 40 years and am well aware of the potential risks of various types of breaches to critical defense infrastructure,” said CleanSpark board member and former U.S. Navy Senior Naval Officer. said Tom Wood, who worked at He said in a statement that his role was as a military analyst. “As noted in the executive order, the presence of data processing facilities owned by the Chinese Communist Party in close proximity to facilities like Warren, which houses some of the intercontinental ballistic missile forces, is a legitimate concern. .”
He said he was familiar with the CFIUS process, calling it “fair, data-driven, and not arbitrary,” and that if U.S. mining operations could address the order's concerns, “this would be a significant I think it's a win-win.” Both for the US and for CleanSpark. ”
Using the power of the Committee on Foreign Investment in the United States (CFIUS) to block acquisitions by owners with ties to China is the eighth use of CFIUS, according to Hogan Lovells, an attorney specializing in the matter. Seven of those incidents involved China. . In an emailed analysis, Anne Saladin and Brian Curran write that this “increases the expanded authority over real estate transactions given to CFIUS and the President under the Foreign Investment Risk Review Modernization Act of 2018. This is the first presidential ban based on the law.
