U.S. officials have their eyes on Chinese crypto mining operations active in the states that could pose a national security threat. The elevated scrutiny comes after a Microsoft team sounded the alarm about an operation in Wyoming in August 2022.
The mining operation’s 2022 groundbreaking raised red flags immediately, the New York Times reported. It sits across the street from a Microsoft data center that supports the Pentagon and less than a mile from the Francis E. Warren Air Force base, which is armed with nuclear missiles.
Microsoft reportedly told the Committee on Foreign Investments in the United States that the location could give China the opportunity to “pursue full-spectrum intelligence collection operations.”
Anonymous sources within the U.S. government told the Times that they have been tracking the operation for months.
This highlights a recent trend in Chinese-operated crypto mining in the U.S. that has American officials and businesses concerned.
In a September meeting, Sean Murphy, who represents Bison Blockchain, a U.S.-based bitcoin mining company, warned Wyoming state legislators that Chinese-related corporations have taken over crypto mining in the state.
“We are talking about a very complicated network of probably eight corporate entities that are controlled and operated by Chinese nationals,” Murphy said. “Then they have varying levels of connections to companies in China, including Bitmain, the largest manufacturer of bitcoin miners in the world.”
In 2021, China banned bitcoin mining, citing energy use and economic destabilization concerns; since then, Bitmain, a Chinese company that equips these mines with computers, has sent 15 times the amount of mining equipment to the U.S. than it had in the previous five years combined.
While Microsoft said there are “no direct indications of malicious activities” by the crypto mining operation next to its data center, concerns remain about the stress that crypto mining operations put on the power grid.
At total capacity, the Cheyenne mining operation uses enough electricity to power 55,000 homes. The concern isn’t limited to Wyoming. In Texas, the power grid was pushed to the brink as a 2023 summer heatwave had residents trying to cool their homes while competing with bitcoin mining operations.
The fear is that the mining operations could leave the U.S. vulnerable to cyberattacks that affect critical infrastructure. In its report on the Cheyenne mining operation, Microsoft said the mine’s location and stress on the power grid “provides significant threat vectors.”
According to court documents, the Cheyenne mine is tied to five companies based out of the same office in Manhattan. One of them was registered in the Cayman Islands and used to be a Chinese pork-processing company. No direct connection has yet been found between the five companies and the Chinese government.
