GOP Lawmaker Demands Urgent Review of Bitcoin Mining Companies

UPDATE: A Republican lawmaker has just called for a federal review of two prominent Bitcoin mining hardware manufacturers, citing potential national security risks linked to their expanding operations in the U.S. Representative Zachary Nunn of Iowa, a member of the House Select Committee on the Chinese Communist Party, sent a letter to U.S. Treasury Secretary Scott Bessent on September 2, 2023, raising alarms about Bitmain Technologies Ltd. and Cango Inc. as they increase their footprint in the American market.

Nunn’s urgent request highlights concerns that these companies could present “potential national security considerations.” As they scale operations through complex ownership structures, transparency regarding their activities remains a crucial issue for regulators and the public.

Bitmain, based in China, is the world’s leading manufacturer of cryptocurrency mining machines, controlling approximately 82% of the global market, according to a recent report from Cambridge University. Cango, on the other hand, is viewed as a potential acquisition target for Bitmain. Both companies have stated they comply with all U.S. laws and are not affiliated with any government entities.

In his letter, Nunn emphasized that the U.S. cannot allow the Chinese government “unchecked access to critical assets that power our economy.” He is committed to collaborating with Bessent to “safeguard American energy, secure our digital asset markets, and defend America’s financial sovereignty and security.”

Nunn’s request for a review is particularly timely. The Committee on Foreign Investment in the United States (CFIUS), which Bessent leads, recently scrutinized foreign companies entering the U.S. market. This committee has had a significant impact in the past, including halting a cryptocurrency mine near an Air Force base due to national security concerns.

In light of these developments, Nunn has urged the CFIUS to investigate specific allegations against Bitmain and Cango. These include potential affiliations with foreign state actors, Bitmain’s possible acquisition of Cango, and the companies’ use of power sources in the U.S.

Bitmain has publicly denied rumors of acquiring Cango, stating that such claims are “not correct.” Cango has refrained from commenting on market speculation regarding mergers and acquisitions.

The urgency of Nunn’s letter stems from a broader context of national security considerations. In previous cases, foreign-made mining equipment has been seized by U.S. authorities due to concerns over surveillance and espionage. With the rise of Bitcoin mining, which consumes massive amounts of electricity and resources, Nunn is seeking clarity on the implications of allowing foreign-made chips to operate within the U.S.

Recently, former President Donald Trump’s sons, Eric Trump and Donald Trump Jr., have made headlines by investing in Bitcoin mining through their company, American Bitcoin Corp. The firm recently purchased approximately $314 million worth of mining machines from a Bitmain subsidiary, further intertwining these companies with high-profile American figures.

As this story develops, the focus will be on how the U.S. government responds to Nunn’s urgent call for action and whether this inquiry will lead to broader scrutiny of foreign entities in the cryptocurrency sector. The implications of these reviews could reshape the landscape of digital asset markets in the United States, making it a critical situation to watch in the coming days.

Stay tuned for more updates on this urgent matter as officials work to assess the potential national security risks posed by these significant players in the Bitcoin mining industry.