President Biden has ordered a Chinese-owned cryptocurrency mine located near a US Air Force base in Wyoming to shut down and sell its operations due to national security concerns. The mine, operated by MineOne Partners Limited, was flagged by Microsoft last year as a potential threat for espionage due to its close proximity to the F.E. Warren base, which controls nuclear-armed intercontinental ballistic missiles. The executive order requires the mine to cease operations immediately, remove all equipment within 90 days, and sell the property within 120 days.
Cryptomining operations involve high-powered computers that perform complex calculations to earn cryptocurrency rewards, with Bitcoin being the most common. The Cheyenne mine operated by MineOne draws as much power as 55,000 homes at full capacity and is part of a larger trend of Chinese-owned mines setting up in the United States. Chinese entrepreneurs are attracted to the US for its cheap electricity and legal system, particularly after China effectively banned cryptomining in 2021. The equipment for these mines is mostly manufactured by Chinese companies.
This crackdown on Chinese-owned cryptocurrency mines is part of a broader effort by US officials to address potential national security threats posed by foreign entities in this industry. President Biden previously signed a bipartisan bill in April targeting the Chinese-owned social media app TikTok, potentially banning it in the US unless sold to an American company. Arkansas Governor Sarah Huckabee Sanders recently signed laws restricting foreign ownership of cryptomining operations in the state, especially targeting Chinese nationals and other countries subject to international arms regulations.
The Chinese-owned cryptomining operations have faced backlash from US residents near the facilities, with complaints about noise pollution and property devaluation. Laws in Arkansas aim to limit the ownership of these operations by foreign nationals and prevent disruption to local communities. Chinese investors, with possible ties to the Communist Party, have been operating mines in several states, prompting concerns about potential espionage activities. In response, the amended laws require foreign-owned cryptomining operations to divest completely within one year.
The primary company targeted by President Biden’s order, MineOne Partners Limited, is an offshore entity with Chinese ownership. Bit Origin Ltd., a former Chinese pork producer turned cryptocurrency miner, partnered with MineOne to establish the Wyoming facility. The president of Bit Origin Ltd., Li Jiaming, stated in a previous interview that the choice of site was based on securing a contract with the local power company rather than proximity to the military base or data center. The lawsuit against MineOne, filed by a Wyoming cryptocurrency company, revealed the ownership of the Chinese nationals involved in the operations.
Overall, the actions taken by US officials indicate a growing concern over the potential risks associated with Chinese-owned cryptocurrency mines operating in the country. The combination of national security threats, noise pollution complaints, and property devaluation issues has led to increased scrutiny of these operations. With the Biden administration’s order to shut down the Wyoming facility and recent legislative efforts in Arkansas, it is clear that foreign ownership in the cryptomining industry is facing significant challenges in the United States.
