Senator Elizabeth Warren has raised concerns to a senate committee about the potential national security risks posed by crypto-mining farms owned by foreign entities. According to data from a blockchain analytics firm, Warren noted that about one-third of the mining facilities operating in the US are Chinese-owned, with some having direct ties to the Chinese government.

“Cryptomining is a disaster for the environment, and it can pose national security risks as well.”

In May 2024, following a recommendation from the Committee on Foreign Investment in the United States (CFIUS), a divestment order was issued to MineOne, a Chinese-owned mining facility in Wyoming. This facility was located just a mile away from the Francis E. Warren Air Force Base in Cheyenne. A nearby Microsoft data center flagged the site in October 2023, suggesting it could be a “full-spectrum intelligence collection operation.”

Senator Warren questioned Assistant Secretary Rosen, who leads CFIUS, about the potential for sophisticated equipment inside the crypto mine to be used for espionage on U.S. military operations and nuclear weapons systems. Rosen confirmed that the equipment could indeed be used for such purposes.

Warren also highlighted potential threats to the US electricity grid, suggesting that foreign-owned mining facilities could cause “targeted blackouts and cyberattacks.”

Cryptocurrencies play a role in this situation, as Warren claims some mining facilities have been purchased using cryptocurrencies, which helps bypass traditional banking systems and anti-money laundering rules. According to Warren, this has allowed millions of dollars to be secretly sent back to China, signaling the need for new legislation.

In a related matter, Warren previously sent a letter in May to US officials about Iran’s use of crypto mining to fund attacks against Israel. She requested information on the revenue generated by Iranian crypto miners and how the US plans to address this threat.

The Biden administration has also initiated a crackdown on the cryptocurrency mining sector, proposing a 30% tax on electricity use by miners. This proposal has faced criticism, with Senator Cynthia Lummis, a Wyoming Republican, claiming it would significantly harm the sector.

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