Crypto mining rigs from Chinese manufacturer Bitmain are being investigated by the U.S. Department of Homeland Security (DHS) due to potential risks to U.S. national security. According to Bloomberg, the federal government launched an investigation, “Operation Red Sunset,” to determine whether Beijing can access these mining machines remotely and use them for cyberespionage or to sabotage the power grid. As part of this probe, the government intercepted some of Bitmain’s imports, dismantled the machines, and tested their chips and code.
The findings of this teardown haven’t been published yet, as the investigation is still ongoing. Aside from assessing Bitmain’s technical capabilities, the authorities are also potentially investigating tariff and import tax violations by the company. However, this isn’t the first time the company’s name has appeared on the DHS's radar. In 2024, then-President Joe Biden shut down a massive Bitcoin mining operation owned by a Chinese entity that used thousands of Bitmain’s Antminer rigs. The government gave the order because it was within a mile of Warren Air Force Base, which hosts some of the U.S.’s Minuteman III intercontinental ballistic missiles. It also appeared earlier this year in a U.S. Senate Intelligence Committee report, which said that Bitmain miners can be remotely manipulated, posing a threat to the U.S.
In its defense, Bitmain released a statement denying these accusations and saying that it “strictly complies with U.S. and applicable laws and regulations and has never engaged in activities that pose risks to U.S. national security” and that it “has no awareness of or any information at all regarding any alleged federal investigation purported to be called ‘Operation Red Sunset.’” It also acknowledged that some of its products were impounded because of issues raised by the Federal Communications Commission (FCC), but that “nothing out of the ordinary” was discovered during that test.
Bitmain is the largest manufacturer of mining rigs, controlling at least 80% of the market. However, the geopolitical rivalry between Washington and Beijing is complicating its operations, with the U.S. becoming wary of large Chinese tech companies. This tension has especially heightened after China enacted its National Intelligence Law in 2017, which compelled companies and individuals to cooperate with Chinese intelligence agencies. We expect things only to get more complicated, especially as many of these manufacturers are transferring production to the U.S. as a strategic move to pivot toward more ‘politically acceptable’ sources.
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