President Biden on Monday ordered a Chinese company to close and sell the Wyoming cryptocurrency mine it built a mile from an Air Force base that controls nuclear-armed intercontinental ballistic missiles.
The crypto mining facility, which operates high-powered computers in a data center near the FE Warren Base in Cheyenne, “presents a national security risk to the United States,” the president said in a executive orderbecause their equipment could be used for surveillance and espionage.
The New York Times reported last October that Microsoft, which operates a nearby data center that supports the Pentagon, had flagged the China-connected cryptocurrency mine to the federal Committee on Foreign Investment in the United States, warning that it could allow Chinese “pursue full-spectrum intelligence gathering operations.” A committee investigation identified risks to national security, according to the president's order.
The order does not detail those risks. But Microsoft's report to the federal committee, obtained last year by The Times, said: “We suggest the possibility that the computing power of an industrial-scale crypto mining operation, along with the presence of an unidentified number of Chinese nationals in “Direct proximity to Microsoft’s headquarters data center and one of three strategic missile bases in the US provides important threat vectors.”
Now, the mine must immediately cease operations and the owners must remove all of their equipment within 90 days and sell or transfer ownership within 120 days, according to the order, which cites the risks of “foreign origin” mining equipment. of the installation. The vast majority of the machinery that powers crypto mining operations in the United States is manufactured by Chinese companies.
crypto mining operations are housed in large warehouses or shipping containers packed with specialized computers that typically run 24 hours a day, performing trillions of calculations per second, searching for a sequence of numbers that will reward them with new cryptocurrencies. The most common is bitcoin, which is currently worth more than $60,000 each. Cryptocurrencies consume a enormous amount of electricity: At full capacity, Cheyenne would consume as much energy as 55,000 homes.
Chinese-owned cryptocurrency mines have seen a boom in the United States since the facilities were effectively banned in China in 2021. While some cryptocurrency mining in China has since restarted, Chinese crypto entrepreneurs are drawn to the United States for its relatively cheap electricity and well-developed legislation. system.
The Times found Chinese-owned or operated bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas and Wyoming, which together use as much energy as 1.5 million homes. Some are owned by people or companies with ties to the Chinese government or the Communist Party. Until recently, the main supplier of equipment to the mines operated from an office at a Communist Party facility on the island of Hainan, The Times found.
President Biden's order comes on the heels of him signing a bipartisan bill in late April that bans the social media app TikTok in the United States unless its Chinese owner sells it.
This is also the second time in recent weeks that elected officials have attacked Chinese-owned crypto mining operations.
This month, Republican Arkansas Governor Sarah Huckabee Sanders signed two laws restricting foreign ownership of crypto mining operations in the state. The legislation prohibits cryptocurrency ownership by foreign nationals from China, Iran, Cuba and other countries subject to State Department rules 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 linked to the authoritarian government were operating at least three mines in Arkansas. One former employee involved with operations wrote about registering “more than 200 targeted mine sites” in more than 10 states.
He crypto/” title=”” rel=”noopener noreferrer” target=”_blank”>laws The restrictions on ownership of crypto mining operations in Arkansas are aimed at amending last year's so-called Right to Mine law, which offered broad protections to the industry by limiting local regulation, and sparked a fierce backlash among residents near of the mines. One such operation, with connections to Chinese nationals, is the subject of a lawsuit by residents who say the incessant screeching of thousands of fans that cool computers has ruined their lives and depressed property values. In addition to new restrictions on noisy operations, the amended law requires that cryptocurrencies owned anywhere by foreign nationals subject to the weapons regulations be completely unwound within one year.
Mr. Biden's order is directed at an offshore company called MineOne Partners Limited and related MineOne entities registered in Delaware. A lawsuit against MineOne filed by a Wyoming cryptocurrency company forced the disclosure of its owners, who included Chinese nationals. In 2022, Bit Origin Ltd., a former Chinese pork producer that moved into cryptocurrency mining, became a partner in a MineOne entity and built the mine, which began operations in early 2023.
Li Jiaming, president of Bit Origin Ltd., was not immediately available for comment. In an interview last year, Li said the investors had chosen the site because they had secured a contract with the local power company to supply their electricity, not because of its proximity to the base or data center.
