In a recent report by The New York Times, concerns about national security have been brought to the forefront, specifically regarding Chinese-owned Bitcoin (BTC) mining operations in the United States. This investigation sheds light on the potential risks and implications associated with these operations, particularly one situated in Cheyenne, Wyoming, which raised alarm bells due to its proximity to critical infrastructure.

The mining facility in Cheyenne is located near a Microsoft data center that supports the Pentagon and an Air Force base responsible for nuclear-armed intercontinental ballistic missiles. Microsoft’s national security threat assessment team expressed deep concerns about the possibilities of “full-spectrum intelligence collection operations” that could be conducted by the Chinese company in such a strategic location.

As a result of Microsoft’s warning, US government officials have anonymously revealed that they have been monitoring the Wyoming mining operation for several months. Although measures were taken to mitigate potential intelligence collection, the specifics were not provided. However, the mining company has cooperated with inquiries from the federal investment committee.

This case in Wyoming highlights a larger trend of increasing Chinese Bitcoin mining operations across the United States, triggering unease and raising additional security concerns. Beyond the worries of intelligence gathering, these mining operations, which comprise large warehouses or containers filled with specialized computers, strain power grids significantly.

These mining computers operate non-stop, consuming vast amounts of electricity as they continuously “mine” for digital coins, particularly Bitcoin. Brian Harrell, former assistant secretary for infrastructure protection at the Department of Homeland Security, expressed concerns that if these mining operations were to collaborate in causing havoc, they could place “enormous stress” on the grid, potentially leading to targeted blackouts or cyberattacks. Harrell emphasized the need for further investigation and scrutiny of any Chinese infrastructure that impacts key energy systems.

The New York Times investigation has identified Chinese-owned or -operated Bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas, and Wyoming. Collectively, these mines consume as much energy as 1.5 million homes. The Cheyenne, Wyoming mine alone requires enough electricity to power 55,000 houses when operating at full capacity.

Bitmain, a prominent Chinese company in the Bitcoin mining sector, plays a significant role in many of these mining facilities. Although there is no apparent direct connection to Chinese authorities, import records indicate that Bitmain has sent shipments to the United States through a subsidiary at a Communist Party site in southern China. Notably, since China banned Bitcoin mining in May 2021 due to energy usage and economic concerns, Bitmain has increased its equipment shipments to the United States by fifteen-fold compared to the previous five years. The company claims to control 90 percent of the global market for Bitcoin mining equipment.

The surge in Chinese-owned Bitcoin mining operations in the United States has raised substantial concerns for national security and energy infrastructure. US authorities are grappling with the potential risks posed by these operations and the strains they place on power grids. As the investigation unfolds, it will be critical to assess and address the implications of these growing operations.

At the time of writing, the price of BTC stands at $26,700 with a recent decline of 3.4% over the past seven days. The largest cryptocurrency in the market has experienced a sideways price movement following the loss of the crucial psychological level of $27,000.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.