United States President Joe Biden has ordered the shutdown and sale of a Chinese-originated crypto mining operation located near a critical Air Force base in Wyoming, the New York Times reported.
The executive order, issued on Monday, mandates the immediate cessation of operations at the facility, which is situated just a mile from the F.E. Warren Air Force Base, a key site for the control of nuclear-armed intercontinental ballistic missiles, the report said.
High-Tech Espionage Risks Highlighted
The cryptomining facility, operated by MineOne Partners Limited and related MineOne entities registered in Delaware, was flagged as a potential security risk due to its proximity to sensitive military installations and a nearby Microsoft data center that supports the Pentagon.
Microsoft had previously alerted the federal Committee on Foreign Investment in the United States (CFIUS) about the dangers posed by the mining operation, suggesting it could facilitate extensive intelligence-gathering activities by China.
In a report obtained by NYT, Microsoft detailed how the industrial-level computing power of the cryptomining facility, combined with the presence of Chinese nationals, could open significant threat vectors for espionage. The investigation by CFIUS confirmed these risks, prompting President Biden’s decisive action to mitigate any potential threats.
Broader Crackdown On Foreign-Owned Tech Enterprises
This executive order is part of a broader strategy by the Biden administration to scrutinize and regulate foreign investments in sectors deemed critical to national security.
Just weeks earlier, a bipartisan bill was signed to ban the social media app TikTok in the United States unless its Chinese owner divests ownership.
The targeting of the Wyoming cryptomining facility reflects a growing consensus in Washington to protect the nation’s technological and strategic infrastructure from foreign interference.
States are also taking similar measures. Arkansas recently enacted laws prohibiting foreign ownership of cryptocurrency mining operations, particularly those from China, Iran, and Cuba.
This legislative action aims to curb the influence of foreign nationals in critical sectors, following reports of Chinese investors operating multiple cryptomines in the state.
The Arkansas laws require foreign-owned cryptomines to divest within a year and impose strict operational restrictions to address local concerns about noise and environmental impact.
Impact On The Crypto Industry
The shutdown order highlights the increasingly challenging regulatory environment for the cryptocurrency industry, particularly for operations with foreign ownership.
Chinese-owned cryptomining facilities have proliferated across the US since China banned such activities domestically in 2021, drawn by the US’s cheap electricity and favorable legal landscape. However, these operations are now under heightened scrutiny due to their potential national security implications.
With President Biden’s order, the MineOne facility must remove all equipment within 90 days and sell or transfer the property within 120 days. The vast majority of the machinery used in these operations is manufactured by Chinese companies, further complicating the security landscape.
Future Of US-China Tech Relations
Biden’s actions represent a clear stance on prioritizing national security over economic or commercial interests when foreign investments pose potential threats. This move is likely to set a precedent for future scrutiny and regulation of foreign-owned enterprises in sensitive sectors.
As the geopolitical rivalry between the US and China intensifies, the intertwining of national security concerns with technology and economic policies will become more pronounced.
Businesses, especially those in high-tech and critical infrastructure sectors, will need to navigate this complex environment, reassessing their operations and compliance strategies to align with stringent US national security policies.
Featured image from Utah’s Adventure Family, chart from TradingView
