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Is Chinese mining equipment in the United States a threat to national security? The U.S. government has been trying to answer that question for months through an investigation into the Chinese company Bitmain, the world’s largest producer of mining hardware.
Operation Red Sunset #
The investigation, codenamed Operation Red Sunset, is an initiative by the U.S. Department of Homeland Security. The trigger was the presence of thousands of Bitmain miners near a U.S. military base. According to a federal assessment from last year, this poses “significant national security risks,” Bloomberg reports.
Bitmain is the world’s largest producer of mining equipment—the computers that power the Bitcoin and other crypto networks and allow users to earn crypto. They consume a lot of energy, but Bitmain produces the most popular and efficient mining equipment—the Antminers—which are used in massive numbers by large mining companies.
Remote Control Capability #
The U.S. government is now concerned that the vast amount of Bitmain’s mining equipment represents a vulnerability that could be exploited by China.
While few details are known, authorities have been investigating for months whether the equipment contains hidden functionality that could be used to destabilize the power grid.
Some shipments have therefore been temporarily held during port inspections to examine the equipment. Potential violations related to import tariffs are also being investigated.
Bitmain: ‘Completely Untrue’ #
Bitmain denies the allegations, emphasizing that it is “completely untrue” that they have methods to operate the equipment remotely. According to Bitmain, the company complies with U.S. law and has never posed a risk to U.S. national security. The company also stated it was not aware of the existence of Operation Red Sunset.
It is unknown whether the investigation has concluded or is still ongoing. A senior official stated:
“The U.S. government is concerned about threats of this nature and monitors them constantly and vigilantly.”
What is clear is that the debate over the role of mining in the U.S. is far from over. As the U.S. crypto industry continues to scale up following the White House’s pro-crypto policies, the mining sector will likely become increasingly intertwined with local energy infrastructure, and the debate will probably flare up more often.