U.S. Monitors Crypto Mining Activities Linked to China Over Security Concerns
Summary:
The U.S. government is reportedly monitoring cryptocurrency mining operations linked to China due to security concerns. The New York Times suggests that numerous Bitcoin data centers in the U.S. are directly tied to the Chinese government, including a Wyoming-based mining operation near a Microsoft data center that is key to the Pentagon. Bit Origin, responsible for the mining operation, reportedly chose the location for its relationship with utility providers, rather than proximity to the Microsoft center. The report also highlights implications of Chinese government- or national-led mining operations in the U.S., given the current political climate.
The U.S. government is apparently keeping a watchful eye on certain Chinese-linked cryptocurrency mining activities. The New York Times reported on October 13 that several Bitcoin (BTC) data centers located in the U.S. have direct connections to the Chinese government. Such proximity to military bases and other nationally important locales has sparked alarm. One highlighted site under the spotlight of the authorities is a mining setup in Wyoming stationed near a Microsoft data center, which also handles aspects of the Pentagon’s functions.
Microsoft stated in a report on the matter, that they haven't found any direct evidence of harmful actions by the entity. Nonetheless, the tech giant raised the potential significance of the computational power of a large-scale crypto mining operation, positioned near Microsoft’s data center and a critical missile base. It noted that this situation coupled with the unidentified number of Chinese nationals within the vicinity could present substantial threat vectors.
Bit Origin, the company that transformed a pig-processing plant into a crypto data center, purportedly selected the site due to agreements with local utility providers, not its proximity to Microsoft facilities. In September, the company moved its operations from Indiana to Wyoming. By the end of the month, it reported having 3,200 active miners with a total hash generation rate of 320 petahash per second.
The report also pointed to potential consequences of setting up mining operations with connections to the Chinese government or certain Chinese nationals, given the current political dynamics between the U.S. and China. A large number of mining companies abandoned China in 2021 due to a government-imposed ban, forcing several to resettle in crypto-friendly locations in the U.S., like Texas and Wyoming. Meanwhile, U.S. officials have been acting against individuals or companies with ties to China via crypto. For instance, on October 3, the Treasury Department issued sanctions on crypto wallets linked to the production of the drug fentanyl, implicating several Chinese-based chemical manufacturers. In a separate incident in July, allegations of crypto company Prometheum’s ties to the Chinese government led six congressional members to demand an investigation.
Published At
10/13/2023 9:33:59 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.