Chinese Bitcoin mining manufacturer Bitmain Technologies Ltd. has reportedly been at the center of a months-long federal investigation in the US over concerns that its products could pose risks to America’s national security.
Chinese Bitcoin Mining Giant Faces US Scrutiny
On Friday, Bloomberg reported that Bitmain, the global leader in Bitcoin mining hardware production, has been under investigation by the US Department of Homeland Security (DHS) for several months due to national security concerns.
According to a US official and six other people familiar with the matter, the investigation, allegedly known as “Operation Red Sunset,” was launched to assess whether Bitmain’s Bitcoin mining hardware could be “remotely controlled for spying or to sabotage the American power grid.”
Reportedly, federal investigators have stopped some of Bitmain’s machines at US ports to learn more about them, occasionally pulling the machines apart to test their chips and code for “malicious capabilities.” Additionally, they examined potential tariff and import tax violations. However, details of what, if anything, was found were not disclosed.
Bloomberg sources claim that the probe was accompanied by policy deliberations at the White House’s National Security Council, with talks that began under the previous government and reportedly carried over into the early months of the Trump administration.
It’s worth noting that the Beijing-based Bitcoin mining manufacturer has faced scrutiny over the past few years, with previous federal reviews raising national security concerns over the use of Bitmain’s machines near military bases in the US.
In July, a report from the US Senate Intelligence Committee alleged that the Bitcoin mining giant’s hardware could be manipulated from China and presented “several disturbing vulnerabilities” to the nation.
Additionally, members of the US House of Representatives have called for a federal investigation into Bitmain. In a September letter, Representative Zachary Nunn asked Treasury Secretary Scott Bessent to review the Chinese firm, citing potential links to foreign state actors.
Bitmain Rejects National Security Concerns
David Feith, senior fellow at the Hudson Institute and a former member of the Trump Administration’s National Security Council, told the news media outlet that “Bitmain has been a screaming challenge on national security grounds and, evidently, on law-enforcement grounds too.”
“This is something that our crypto industry and crypto policy should turn a lot more focus to,” Feith suggested. However, Bitmain rejected these concerns in a statement to Bloomberg, affirming that “it’s ‘unequivocally false’ to assert that the company can remotely control its machines from China.”
The firm stated that it “strictly complies with US and applicable laws and regulations and has never engaged in activities that pose risks to US national security,” adding that it “has no awareness of or any information at all regarding any alleged federal investigation purported to be called ‘Operation Red Sunset.’”
Moreover, the Bitcoin mining giant revealed that it was unaware of the investigation related to tariffs or import duties, noting that the detentions of its machines were due to concerns raised by the Federal Communications Commission and “nothing out of the ordinary was found.”
As Bloomberg reported, the status of the investigation remains unclear, and it could carry on for an extended period without resulting in public legal proceedings. Regarding the inquiry, a senior administration official said that “the US government is concerned about threats of this nature and are constantly and vigilantly monitoring them.”
Meanwhile, the Department of Homeland Security’s spokesperson, Mike Alvarez, told the news media outlet that the DHS “does not comment on open and active investigations.”
Bitcoin (BTC) trades at $84,512 in the one-week chart. Source: BTCUSDT on TradingView
