Sen. Warren warns of ‘national security risks’ with foreign-owned crypto mining firms

Senator Elizabeth Warren has warned a Senate committee that foreign-owned crypto mining farms pose a serious risk to national security.

Citing data from a “blockchain analytics farm,” the senator emphasized that “one-third” of mining facilities operating in the U.S. are Chinese-owned, adding that some have “direct links to the Chinese government.”

“Crypto mining is a disaster for the environment and can also create national security risks.”

Elizabeth Warren, United States Senator

Senator Warren recalled a divestment order issued to MineOne, a Chinese mining facility being built in Wyoming, in May 2024, on the recommendation of CFIUS. The facility was located just one mile from Francis E. Warren Air Force Base in Cheyenne.

A nearby Microsoft data center flagged the site in October 2023. The company issued a warning that it could be a “full-spectrum intelligence-gathering operation.”

The senator then asked Assistant Secretary Rosen, who oversees CFIUS, whether the equipment in the crypto mine could be used to “spy” on U.S. military operations and nuclear weapons systems.

Rosen acknowledged that such “sophisticated equipment” could also be used for espionage purposes.

The senator also highlighted threats to the U.S. power grid, claiming that these foreign entities could potentially lead to “targeted blackouts and cyberattacks.”

Cryptocurrencies also have a role to play in this case, as Warren claims that some of these mining rigs were purchased using cryptocurrencies. He added that using crypto helps “bypass our traditional banking system and anti-money laundering rules.”

Warren said crypto mining companies were using this strategy to “secretly send millions of dollars back to China” and said it was time for the US to legislate on the issue.

Warren’s latest warning comes after she wrote a letter to U.S. officials in May about Iran’s use of crypto mining to “fund attacks on Israel.” In the letter, Warren asked for details on the revenue generated by Iranian crypto miners and how the U.S. planned to deal with the threat.

The Biden administration has also launched a crackdown on the cryptocurrency mining industry, proposing a 30% tax on miners’ electricity use. The move was met with criticism, with Wyoming Republican Senator Cynthia Lummis claiming it would “destroy” the industry.