Leading Bitcoin mining application specific integrated circuit (ASIC) manufacturer Bitmain, based in China, is reportedly under investigation in the US over national security concerns.
According to Bloomberg Friday a reportAn unidentified US official and six other unidentified people familiar with the matter said that Bitmain devices are the focus of a federal investigation known as “Operation Red Sunset.” The investigation, led by the US Department of Homeland Security, is said to seek to determine whether ASIC devices could be controlled remotely to spy on or sabotage the US power grid.
US authorities previously investigated a Chinese chip designer linked to Bitmain Xiamen Sophgo regarding an alleged business relationship With Huawei subject to US sanctions in October 2024. This was followed by the US Customs and Border Protection Agency halting the trade Thousands of Bitmain ASICs delivered Next month. Authorities only The devices began launching in March this year.
Consequences for the United States Crypto mining The industry could be far-reaching, given that Bitmain controls more than 80% of the Bitcoin mining ASIC market, according to a report from the University of Cambridge. a report. Chinese dominance in the industry is becoming more stringent, with Bitmain and the second-largest manufacturer, MicroBT, based in mainland China, each controlling 97% of the market share on their own.
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In some cases, investigators have taken apart Bitmain ASIC devices to look for malicious capabilities, the anonymous officials told Bloomberg. They declined to say whether anything was found.
A Bitmain spokesperson told Bloomberg that it is “unequivocally false” that the company is able to control its devices remotely. Instead, a company representative claimed that it “strictly complies with applicable US laws and regulations and has never engaged in activities that pose risks to US national security,” and is not aware of the investigation.
Donald Trump’s skin in the game
Imposing restrictive measures on Bitmain devices is also likely to have consequences US President Donald Trumpfamily. In August, a Bitcoin mining company backed by members of the Trump family, American Bitcoin Inc., It acquired a fleet of 16,299 Antminer miners U3S21EXPH modules from Bitmain.
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The company also inherited “substantially all” of the Hut 8’s ASIC hardware. This includes 31,145 Bitmain Antminers S21+ Acquired about a year ago.
In September, US Bitcoin Announce It has “preferential access to next-generation ASIC computing infrastructure,” without explicitly citing Bitmain. US Securities and Exchange Commission (SEC) filings It also reveals that US Bitcoin was “paid through a Bitcoin Pledge” with a “recovery period of 24 months from the date of each pledge,” terms set out by The Guardian. Reports They are extraordinarily generous.
With Bitmain dominating this space, US Bitcoin is not the only major cryptocurrency mining company in the US that may be affected by the results of this investigation. The industry has already learned what could happen when shares of mining companies trade publicly in mid-February in the United States The United States felt the effects of trade tensions Between the US and China through delays in receiving shipments of their ASIC devices.
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