Bloomberg Reports on US Investigation into Bitmain

Bitmain faces US investigation over national security concerns, Bloomberg reports.

The largest manufacturer of Bitcoin miners, Bitmain, has become the subject of a US government investigation due to potential national security threats, according to Bloomberg.

Sources indicate that last year, “serious concerns” arose over the use of the Chinese company’s equipment at a mining facility located near a military base.

In July, Bitmain was mentioned in a Senate Intelligence Committee report. Experts claimed that the firm’s devices could be manipulated from China and posed “a number of alarming vulnerabilities” for the US.

Throughout this period, Bitmain has been at the center of an investigation dubbed “Operation Red Sunset,” led by agents from the Department of Homeland Security. Investigators aimed to determine whether mining equipment could be remotely controlled for espionage or sabotage of the American energy system.

The operation began during Joe Biden’s presidency and continued into the early months of Donald Trump’s administration.

Seizures of Bitmain installations imported into the US since last autumn were also part of the investigation. In some cases, specialists dismantled ASIC miners to check chips and code for malicious functions. Bloomberg’s sources declined to discuss the findings. Investigators also examined shipments for possible customs violations.

Bitmain stated they were unaware of any government actions concerning the company. The detention of equipment was attributed by company representatives to routine procedures by the US Federal Communications Commission, which ultimately “found nothing unusual.”

Another Conflict of Interest?

According to Bloomberg, the current status of “Operation Red Sunset” is unclear. Such investigations can last for years without resulting in public actions. A senior Trump administration official declined to comment on the case, stating only:

“The US government is concerned about threats of this nature and constantly monitors them closely.”

Journalists noted that the investigation draws public attention due to Bitmain’s business ties with the Trump sons’ company, American Bitcoin. It was established in March as a subsidiary of the Bitcoin miner Hut 8.

In August, American Bitcoin signed a contract with the Chinese manufacturer to supply 16,000 Antminer units for $314 million. To acquire the equipment, the American firm placed a deposit of 2234 BTC under undisclosed public conditions.

Bloomberg reports that in the summer, another Trump cryptocurrency project received crucial assistance from the exchange Binance in launching its own stablecoin. Subsequently, Trump pardoned the platform’s founder, Changpeng Zhao, who had previously served a sentence for a criminal offense.

“Neither the president nor his family have ever been involved in or will be involved in conflicts of interest,” stated White House Press Secretary Karoline Leavitt.

In May 2024, President Biden signed an order prohibiting the Chinese mining company MineOne from owning a facility near an Air Force base in Wyoming.

It turned out that the facility was already in the process of being sold to the American company CleanSpark.