Important points
- DHS is investigating Bitmain’s rig for covert remote access risks related to China.
- The investigation was sparked by a large-scale deployment near a sensitive U.S. base.
- Potential import violations and restrictions could hit US Bitcoin miners hard.
The United States is investigating Bitmain, a Chinese company that makes most of the world’s Bitcoin mining machines. The government wants to know whether these machines could be used to spy on or sabotage critical U.S. systems, Bloomberg reports.
The investigation, dubbed “Operation Red Sunset,” is being led by the Department of Homeland Security. Authorities are investigating Bitmain machines for hidden features that could be controlled remotely by someone inside China.
This could lead to data theft, surveillance, or damage to US infrastructure.
To find out more, federal agents removed some of Bitmain’s machines at a U.S. port, disassembled them and examined the chips and software for “malicious functionality.”
According to Bloomberg, US authorities have become alarmed after discovering a large group of Bitmain machines operating near important and sensitive locations.
These include power plants, military bases, and even a U.S. Air Force nuclear missile facility in Wyoming. A government investigation called the situation a “grave national security risk.” Officials fear the machines could be remotely controlled from China.
A Senate Intelligence Committee report said the machines could be operated from China and had “several alarming vulnerabilities.” The report also warned that having large numbers of these devices next to major U.S. facilities is an “unacceptable risk.”
While investigators were checking the machines, the White House National Security Council was also holding a policy meeting on the issue. These discussions began during the Biden administration and continued after the leadership change.
According to some reports, these meetings were temporarily suspended after Trump took office, but the administration has publicly denied that policy work has been halted.
As Bloomberg reports, DHS has not publicly commented on the status of the investigation, with a spokesperson saying only that the department “does not comment on open, active investigations.”
In addition to national security concerns, law enforcement authorities are also investigating whether Bitmain violates import and customs laws. This means authorities are investigating whether the machines were brought into the country legally and whether all required duties were paid.
Bitmain and another Chinese company, MicroBT, control almost the entire global market for Bitcoin mining hardware. If the US decides to restrict or ban these machines, US Bitcoin miners will have a hard time finding alternatives.
Other manufacturers exist, but they are often more expensive, less powerful, or difficult to obtain in large quantities.
According to the report, Bitmain denied the allegations and said the allegations against it were “patently false.” The company insists it “strictly complies with U.S. and applicable laws and regulations and has never engaged in activities that pose a risk to U.S. national security.”
Bitmain insists it complies with all US laws and that its machines cannot be controlled remotely. He also stressed that he is not affiliated with the Chinese government and has never heard of Operation Red Sunset.
Bitmain said its device was detained at a U.S. port following a routine inspection by the Federal Communications Commission, which found nothing suspicious.
The issue has gained even more attention because Eric Trump and Donald Trump Jr. have business ties to Bitmain. Their company, American Bitcoin Corp., recently purchased 16,000 Bitmain machines for about $314 million. Instead of cash transfers, they agreed to pay in Bitcoin over time.
As of now, no one knows the current status of Operation Red Sunset. National security investigations can take years and may never result in a public prosecution or trial.
