President Biden on Monday ordered a Chinese-origin company to close and sell the Wyoming cryptocurrency mine it set up a mile from an air base that controls nuclear-armed intercontinental ballistic missiles.
The cryptomining facility, which operates high-performance computers at a data center near FE Warren’s base in Cheyenne, “poses 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 runs a nearby data center that supports the Pentagon, had reported the China-linked cryptocurrency mine to the Federal Committee on Foreign Investment in the United States, warning that it “could enable the Chinese to pursue it.” . comprehensive intelligence collection operations.” A committee investigation found risks to national security, according to the presidential order.
These risks were not further explained in the order. However, Microsoft’s report to the federal committee, obtained by The Times last year, said: “We suspect the possibility that the computing power of an industrial-level cryptomining operation, coupled with the presence of an unidentified number of Chinese nationals in close proximity.” “The data center and one of three U.S. strategic missile bases represent significant threat vectors.”
Now the mine must cease operations immediately and the owners must remove all of their equipment within 90 days and sell or transfer ownership within 120 days, the order said, citing the risks of the facility’s “foreign” mining equipment is pointed out. Much of the machinery that powers crypto mining operations in the United States is manufactured by Chinese companies.
Cryptomining operations are housed in large warehouses or shipping containers packed with special computers that typically run 24 hours a day, performing trillions of calculations per second and searching for a sequence of numbers that will reward them with new cryptocurrency. The most widely used is Bitcoin, which is currently worth more than $60,000 each. Crypto mines use an enormous amount of electricity: at full capacity, the mine in Cheyenne would use as much electricity as 55,000 households.
Chinese-owned cryptocurrency mining operations have been booming in the United States since the facilities were effectively banned in China in 2021. While some crypto mining activities have now resumed in China, Chinese crypto entrepreneurs are drawn to the United States because of its relatively cheap electricity and well-developed legal system.
The Times found Chinese Bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas and Wyoming, which together consume as much electricity as 1.5 million homes. Some belong to people or companies with ties to the Chinese government or the Communist Party. Until recently, the main supplier of equipment for the mines operated out of an office at a Communist Party facility on Hainan Island, The Times found.
President Biden’s order follows the signing of a bipartisan bill in late April that would ban 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 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 the ownership of cryptomines by foreign nationals from China, Iran, Cuba and other countries subject to U.S. 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 operation wrote of searching “over 200 target mining sites” in more than 10 states.
Laws restricting ownership of crypto mining operations in Arkansas are intended to change last year’s so-called “Right to Mine” law, which gave the industry broad protection by restricting local regulations and sparked a fierce backlash among nearby residents that triggered mines. One of those operations, linked to Chinese nationals, is the subject of a lawsuit from residents who say the incessant whining of the thousands of fans that cool computers has ruined their lives and reduced the value of their properties. In addition to new restrictions on noisy operations, the amended law requires cryptomines partially owned by foreigners subject to gun regulations to be fully divested within a year.
Mr. Biden’s order targets an offshore company called MineOne Partners Limited and affiliated MineOne companies based in Delaware. A lawsuit filed by a Wyoming cryptocurrency company against MineOne forced disclosure of its owners, including Chinese nationals. In 2022, Bit Origin Ltd., a former Chinese pork producer that turned to cryptocurrency mining, became a partner in a MineOne company and built the mine, which began operations in early 2023.
Li Jiaming, president of Bit Origin Ltd., could not immediately be reached for comment. In an interview last year, Mr. Li said investors chose the location because they had a contract with the local utility for power, rather than because of its proximity to the base or data center.
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2024-05-14 01:23:38
www.nytimes.com
