USA investigating Chinese Bitcoin miners operating within its borders

The United States is not very keen on Chinese Bitcoin mining companies operating on its territory, for the simple reason that they are directly connected to the energy grid of several important states. As tensions rise between the two superpowers, Bitcoin appears to be becoming an important pawn in negotiations between the two.

Some American politicians claim that Chinese Bitcoin companies report directly to Beijing and therefore want to ban them from entering the US.

TikTok

Back in 2021, China surprisingly banned Bitcoin mining on its territory. With their very cheap energy, the country had become the largest bitcoin miner in the world in just a few years. Bitcoin was trading around $50,000 and so those Chinese companies were really making record profits.

But Beijing mainly wanted attention for their own E-Yuan, the digital currency, and Bitcoin stood in the way of that (and in the way of their transition to ‘green energy’). So crypto mining was officially banned. At the time the decision was announced, Bitcoin’s price immediately fell 9% to $41,000.

Of course, all those Chinese companies had to relocate, since Bitcoin was trading at a high profit in 2021 and in a country with cheap energy it was still interesting for companies to perform the activity.

Kazachstan

What happened? Some moved to Kazakhstan, some to the United States (especially Texas) and a small part of them stayed in China and mined Bitcoin illegally.

China thus remained the second largest Bitcoin miner in the world, but the United States took over the top spot.

However, a trade war has broken out between the two superpowers. China and the United States impose tariffs on the import and export of goods and even banned some industries from operating on the other’s territory.

Bitcoin Mining Moves to US: China's Regulations Drive Shift#today #usa #techtrends #innovation #technology https://t.co/RIMSFTQ4s9

— USNewsper_Technology (@UsnewsperTech) October 13, 2023

For example, American chip companies are not allowed to export AI chips to the United States and TikTok, an originally Chinese social media platform, was accused of ‘spying’ for the Chinese government by keeping all kinds of data about American youth on their servers.

In recent weeks, Bitcoin has also become a target.

After all, several Bitcoin mining companies are linked to the energy network. The biggest ones, like Riot blockchain mining, can even sell extra energy to a state’s grid, as happened recently during a heatwave in Texas.

But according to the US Secret Service, there are also many Chinese Bitcoin companies in the United States.

The ball started rolling when a Chinese company established a crypto mining operation in Cheyenne, Wyoming last year. A Microsoft team sent out a national security alert as the Chinese company operated next to a Microsoft data center that supported the Pentagon, which was also about a mile away from an Air Force base that controlled nuclear-armed intercontinental ballistic missiles.

By now, a list has been drawn up of 12 Chinese Bitcoin companies that operate in the United States which are directly linked to the energy grid.

“We’re all worked up over TikTok, but nobody seems to be saying anything about these Chinese companies connecting to our grids,” explains Bryan King, a Republican state senator in Arkansas.

His district includes the city of Harrison, where a Chinese investment group has recently purchased land for a Bitcoin mine. “It just doesn’t make sense,” Bryan says.