US Probes Bitmain ASICs for National Security Risks: Report

The leading Bitcoin mining application-specific integrated circuit (ASIC) manufacturer, Bitmain, which is based in China, is reportedly under investigation in the US over national security concerns. According to a Friday Bloomberg report, an unspecified US official and six other anonymous people familiar with the matter said that Bitmain’s hardware is at the center of a federal investigation known as “Operation Red Sunset.” The investigation, led by the US Department of Homeland Security, reportedly seeks to determine whether the ASICs could be remotely controlled for spying or to sabotage the US power grid. US authorities previously investigated Bitmain-linked Chinese chip designer Xiamen Sophgo over an alleged business relationship with US-sanctioned company Huawei in October 2024. This was followed by the US Customs and Border Protection Agency halting the delivery of thousands of Bitmain ASICs the following month. Authorities only began releasing the hardware in March this year. Consequences for the US crypto mining industry could be far-reaching, since Bitmain controls over 80% of the Bitcoin mining ASIC market, according to a Cambridge report. Chinese dominance in the industry is even more ironclad, with both Bitmain and the second-largest manufacturer, MicroBT, based in mainland China, controlling 97% of the market share on their own. Related: Bitmain to open first US-based ASIC chip factory: Bloomberg In some cases, investigators even disassembled Bitmain ASICs 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’s “unequivocally false” that the company is capable of remotely controlling its machines. Instead, the company representative claimed that it “strictly complies with US and applicable laws and regulations and has never engaged in activities that pose risks to US national security,” and is unaware of the investigation. Donald Trump’s skin in the game Imposing restrictive measures on Bitmain machines is also likely to lead to consequences for US President Donald Trump’s family. In August, a Bitcoin mining company backed by members of Trump’s family, American Bitcoin, acquired a fleet of 16, 299 Antminer U3S21EXPH units from Bitmain. Related: Bitcoin ASIC producer Canaan pilots US production, exits AI business The company also inherited “substantially all” of Hut 8’s ASICs. This includes the 31, 145 Bitmain Antminers S21+ machines it acquired about a year ago. In September, American Bitcoin announced that it has “preferential access to next-generation ASIC compute infrastructure,” without explicitly citing Bitmain. US Securities and Exchange Commission (SEC) filings also reveal that American Bitcoin “paid through the pledge of Bitcoin” with a “redemption period of 24 months from each pledge date,” terms which The Guardian reports are unusually generous. With Bitmain so dominant in the space, American Bitcoin is far from the only major US-based crypto mining company that may be affected by the findings of this investigation. The industry already got a taste of what might happen when, in mid-February, publicly traded mining companies in the US felt the effects of trade tensions between the United States and China through delays in receiving shipments of their ASICs.
https://bitcoinethereumnews.com/tech/us-probes-bitmain-asics-for-national-security-risks-report/

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