Biden bans Chinese bitcoin mine near nuclear missile base
NEW YORK: President Joe Biden on Monday ordered a company with Chinese origins to shut down 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 centre near the F.E. Warren base in Cheyenne, “presents a national security risk to the United States,” the president said in an executive order, because its equipment could be used for surveillance and espionage.
The New York Times reported last October that Microsoft, which operates a nearby data centre supporting the Pentagon, had flagged the Chinese-connected cryptocurrency mine to the federal Committee on Foreign Investment in the United States, warning that it could enable the Chinese to “pursue full-spectrum intelligence collection operations.” An investigation by the committee identified risks to national security, according to the president’s order.
The order did 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-level crypto-mining operation, along with the presence of an unidentified number of Chinese nationals in direct proximity to Microsoft’s Data Center and one of three strategic-missile bases in the US, provides significant threat vectors.”
Now, the mine must immediately cease operations, and the owners must remove all their equipment within 90 days and sell or transfer the property within 120 days, according to the order, which cites the risks of the facility’s “foreign-sourced” mining equipment. Chinese companies manufacture the vast majority of the machinery powering crypto-mining operations across the United States.
Crypto-mining operations are housed in large warehouses or shipping containers packed with specialised computers that typically run around the clock, performing trillions of calculations per second, hunting for a sequence of numbers that will reward them with new cryptocurrency. The most common is bitcoin, currently worth more than $60,000 apiece. Crypto mines consume an enormous amount of electricity: At full capacity, the one in Cheyenne would draw as much power as 55,000 homes.
A BOOMING INDUSTRY
Chinese-owned cryptocurrency mines have boomed in the United States since the facilities were effectively banned in China in 2021. While some crypto mining has since restarted in China, Chinese crypto entrepreneurs are drawn to the United States for its relatively cheap electricity and well-developed legal system.
The Times found Chinese-owned or -operated bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas and Wyoming, that together use as much power as 1.5 million homes. Some are owned by people or companies with links to the Chinese government or the Communist Party (CCP). Until recently, the main supplier of equipment for the mines operated from an office in a CCP facility on Hainan Island, the Times found.
Biden’s order comes on the heels of his signing a bipartisan bill in late April banning 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 Chinese-owned crypto-mining operations have been targeted by elected officials.
This month, Arkansas’ Republican governor, Sarah Huckabee Sanders, signed two laws restricting foreign ownership of crypto-mining operations in the state. The legislation prohibits crypto-mine 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 with ties to the authoritarian government were operating at least three mines in Arkansas. A former employee connected to the operations wrote of scouring “over 200 target mining sites” in more than 10 states.
The laws restricting ownership of crypto-mining operations in Arkansas are intended to amend last year’s socalled Right to Mine law, which offered broad protections to the industry by limiting local regulation and set off a fierce backlash among residents near the mines.
One of those operations, with connections to the Chinese nationals, is the target of a lawsuit by residents who say the incessant whine from the thousands of fans cooling the computers has ruined their lives and depressed property values.
In addition to new restrictions on noisy operations, the amended law requires cryptomines owned in any part by foreign nationals subject to the arms regulations to completely divest within one year.