Crypto

Biden Blocks China-Linked Bitcoin Mine Near Nuke Base Amid Security Concerns

Biden orders halt of China-linked bitcoin mine near nuclear base, escalating US-China tech tensions.

By Mackenzie Crow

5/16, 17:16 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • President Biden ordered the halt of a Wyoming bitcoin mine near a nuclear base, recently bought by CleanSpark (CLSK) from MineOne with Chinese ties.
  • CleanSpark's $19 million acquisition faces national security scrutiny due to proximity to Warren Air Force Base and foreign-sourced technology use.
  • This marks the first presidential prohibition under the 2018 Foreign Investment Risk Review Modernization Act, highlighting U.S.-China investment tensions.

US-China Tensions Escalate Over Crypto Mining

In a significant development that underscores the growing tensions between the United States and China over technology and national security, President Joe Biden has ordered the cessation of operations at a bitcoin mining facility near Warren Air Force Base in Wyoming. This facility, recently acquired by American bitcoin mining company CleanSpark from MineOne, a company with Chinese ties, is situated perilously close to a critical U.S. nuclear missile base. The executive order highlights concerns over the use of foreign-sourced technology, particularly noting that MineOne is majority-owned by Chinese nationals. This move comes amidst broader efforts by the Biden administration to curb Chinese influence in sectors deemed crucial to national security.

CleanSpark's Ambitious Acquisition Amidst Political Crossfire

CleanSpark's recent acquisition of two mining sites for nearly $19 million in cash has thrust the company into the center of a geopolitical storm. The deal, aimed at expanding the company's mining operations by an additional 55 megawatts, was predicated on deploying mining machines from China-based Bitmain. However, the proximity of the larger property to Warren Air Force Base, about 4,000 feet from its closest edge, has raised alarms at the highest levels of government. Despite CleanSpark's assertions of being unaware of the executive order prior to the purchase, the situation has introduced a complex layer of regulatory scrutiny to the deal. Tom Wood, a CleanSpark board member with extensive national security experience, emphasized the legitimacy of the concerns raised by the president's order, acknowledging the potential risks posed by a CCP-owned data processing facility near critical defense infrastructure.

Regulatory and Security Implications

The intervention by the Committee on Foreign Investment in the United States (CFIUS) marks a significant use of its powers to block acquisitions by entities tied to China, reflecting heightened vigilance over foreign investments near sensitive sites. This action, the eighth of its kind and predominantly targeting China, underscores the U.S. government's steadfast commitment to safeguarding national security. The Foreign Investment Risk Review Modernization Act of 2018 has expanded CFIUS's authority, enabling it to act decisively in such cases. The implications of this move are far-reaching, affecting not only the involved companies but also signaling a broader stance on foreign technology and investment near critical national infrastructure.

Management Quotes

  • CleanSpark spokesperson:

    "The executive order and the involvement of CFIUS, both of which we were unaware of before signing the deal, has added an unexpected layer to the closing process, but we are working through these developments toward a satisfactory closing." "We respect the oversight process and are dedicated to ensuring that our operations bolster national security and benefit economic development, particularly in Wyoming, a state that has been at the forefront of developing and nurturing a pro-Bitcoin environment."

  • Tom Wood, CleanSpark board member:

    "I have been deeply involved in National Security affairs for nearly four decades, and am well aware of the potential risks of many different types of encroachment on important defense infrastructure. The presence of a CCP-owned data processing facility near a facility like Warren which houses a portion of the nation’s ICBM force is legitimate cause for concern as noted by the president’s order." "If the U.S. mining business can address the concerns in the order, I would consider this a significant win-win for the United States and for CleanSpark."