Biden Blocks China-Backed Crypto Mining Firm from Wyoming

In a decisive move aimed at safeguarding national security, President Joe Biden’s administration has ordered the cessation of construction for a China-backed cryptocurrency mining facility in Wyoming. This order requires MineOne Cloud Computing Investment and its partners to divest their property near the Francis E. Warren Air Force Base in Cheyenne, Wyoming.

Key Details of the Order

The directive, issued on May 13, 2024, mandates that MineOne Cloud Computing Investment, majority-owned by Chinese nationals, must halt all operations and remove installed equipment from the site. The company is also prohibited from transferring these assets to any third party, emphasizing the government’s intent to eliminate any potential security threats posed by the facility’s location and operations.

National Security Concerns

The primary concern driving this order is the potential risk to national security. The proximity of the crypto mining site to a critical U.S. military installation raises significant alarm. According to the order, there is credible evidence suggesting that the facility could impair national security, particularly given its connections to Chinese nationals.

The site was flagged by Microsoft in October 2023, which operates a nearby data center. Microsoft’s alert to the Federal Committee on Foreign Investment in the United States (CFIUS) described the potential for the mining operation to function as a “full-spectrum intelligence collection operation.” This, combined with the site’s strategic location near one of three U.S. strategic-missile bases, highlighted significant threat vectors.

Broader Implications and Industry Impact

This move reflects the broader geopolitical tensions between the United States and China, particularly in the realm of technological and economic influence. The Biden administration’s actions are part of a larger strategy to curb Chinese investments in critical sectors that could pose security risks.

The impact of this decision extends beyond national security, affecting the broader cryptocurrency mining industry in the United States. Following China’s ban on cryptocurrency mining in 2021, many Chinese-owned mining farms migrated to the U.S., attracted by regions offering cheap electricity. States like Texas, Wyoming, Arkansas, and Ohio have seen an influx of these operations.

Recent Regulatory Measures

In addition to blocking specific projects, the Biden administration has implemented broader regulatory measures targeting the cryptocurrency mining sector. Last month, a new policy introduced a 30% tax on electricity use by crypto miners, aimed at curbing the environmental impact and addressing concerns about the extensive energy consumption associated with mining activities. This move has faced criticism from industry stakeholders, including Senator Cynthia Lummis of Wyoming, who argued that such measures could “destroy” the sector.

Conclusion

The Biden administration’s decision to block the China-backed crypto mining firm in Wyoming underscores the critical balance between fostering technological innovation and safeguarding national security. As geopolitical tensions continue to shape the regulatory landscape, the future of cryptocurrency mining in the U.S. will likely involve increased scrutiny and strategic decision-making to ensure that national interests are protected. This development highlights the complex interplay between technology, security, and international relations in the rapidly evolving world of digital assets.