Senator Elizabeth Warren warns countries, led by China, are spying on the U.S. through cryptocurrency mining

Senator Elizabeth Warren has voiced strong opposition against foreign-owned crypto mining operations in the United States.

During a Senate Committee on Banking, Housing, and Urban Affairs hearing on July 25, she labelled these operations as loud, hot, and heavy consumers of electricity, potentially jeopardising the power grid.

Foreign mining equipment may endanger national security

Warren described foreign-owned crypto mining facilities as a national security threat. She pointed to a specific Chinese-owned facility, MineOne, located near a strategic missile base in Wyoming. This facility was ordered to be removed by President Biden in May.

Espionage Risks

Warren warned that foreign adversaries might use crypto mines for espionage on US military operations. She emphasised that these facilities pose broader risks, including potential threats to the energy grid through targeted blackouts and cyberattacks.

“Foreign adversaries are using cryptomines to spy on US military operations. That is an obvious national security risk. But it isn’t the only risk. Foreign-owned cryptomines also threaten the energy grid.”

Financial Secrecy and Evasion

Warren accused foreign entities of secretly buying mining facilities using cryptocurrencies to bypass traditional banking systems and Anti-Money Laundering rules. She claimed that this method allowed US-based crypto mines to send millions of dollars back to China covertly.

Call for Legislation

Warren concluded her remarks by calling for legislative action to address the risks posed by foreign-owned crypto mining operations.

Benefits from Crypto Mining

Research published in November 2023 highlighted that crypto mining can benefit energy grids by balancing load and increasing renewable electricity capacity. Crypto mining’s interruptibility and swift load response capabilities could enhance power grid flexibility.

Biden dismantles Chinese-owned crypto miners near missile bases

In April, the Biden administration initiated a crackdown on the crypto mining industry, citing China's approach as a model in its regulatory efforts.

“There is credible evidence that leads me to believe that MineOne Partners Limited, a British Virgin Islands company ultimately majority owned by Chinese nationals [...] might take action that threatens to impair the national security of the United States.”

The order,releasedby the White House on May 13, forces MineOne Cloud Computing Investment and its partners to divest property operated as a crypto mining facility near the Francis E. Warren Air Force Base in Cheyenne, Wyoming.

Biden cited national security concerns for the order to rescind the firm’s property rights.