US government officials were reportedly monitoring certain cryptocurrency mining operations with ties to China.
According to an October 13 report from the New York Times, many US-based bitcoin (btc) data centers may be bitcoin-mines-china-united-states.html” target=”_blank” rel=”noopener nofollow”>tracked directly to the Chinese government, raising concerns about operations in the vicinity of military bases and other areas connected to national security. One of the sites that was allegedly being monitored by authorities was a mining operation in Wyoming near a Microsoft data center that supported some of the Pentagon’s operations.
“Microsoft has no direct indications of malicious activity by this entity,” the firm said in a report on the operation. “However, pending further discovery, we suggest the possibility that the computing power of an industrial-scale crypto mining operation, coupled with the presence of an unidentified number of Chinese nationals in direct proximity to the data center of Microsoft and one of three strategic missile bases in the United States, provides important threat vectors.”
The company Bit Origin, which converted the infrastructure of a pork processing facility into a crypto data center, chose the location due to an agreement with local utility providers rather than proximity to Microsoft facilities. The company moved its operations from Indiana to Wyoming in September and stocks/bit-origin-ltd-announces-production-and-operation-update-for-september-2023-1032700531″ target=”_blank” rel=”noopener nofollow”>reported It had 3,200 miners deployed producing a hash rate of 320 petahash per second as of September 30.
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The report highlighted some of the ramifications of establishing mining operations linked to the Chinese government or certain citizens amid political tensions between the United States and China. Many mining companies fled China in 2021 when the government banned their operations, forcing some to relocate to US soil and cryptocurrency-friendly jurisdictions such as Texas and Wyoming.
Many US authorities have targeted individuals or companies connected to China through cryptocurrencies. On October 3, the Treasury Department sanctioned crypto 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 prompted six members of Congress to call for an investigation.
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