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Concerning national security, China keep an eye on Bitcoin miners connected to China: Report

Close scrutiny is reportedly underway concerning a cryptocurrency mining venture situated in proximity to a Microsoft facility supporting Pentagon operations, as acknowledged by U.S. authorities.

Recent reports from The New York Times, dated October 13, indicate that U.S. government officials are closely monitoring specific cryptocurrency mining activities with connections to China.

Concerns have arisen due to the identification of numerous Bitcoin data centers in the U.S. directly linked to the Chinese government. This has raised alarms regarding operations located near military bases and other sites critical to national security. Among the monitored sites is a mining operation in Wyoming, situated close to a Microsoft data center supporting Pentagon functions.

In a report on the operation, Microsoft stated, “There are no direct indications of malicious activities by this entity.” However, acknowledging the potential threats, Microsoft suggests considering the computing power of an industrial-scale cryptomining operation, combined with the presence of unidentified Chinese nationals near Microsoft’s Data Center and one of the three strategic-missile bases in the U.S.

Bit Origin, the company responsible for converting a pork processing facility into a crypto data center, reportedly selected the location based on an agreement with local utility providers rather than its proximity to the Microsoft facility. Having relocated from Indiana to Wyoming in September, the firm reported deploying 3,200 miners, generating a hash rate of 320 petahashes per second as of September 30.

The report sheds light on the consequences of establishing mining operations associated with the Chinese government or specific nationals amidst the political tensions between the U.S. and China. In 2021, many mining companies migrated from China due to government bans, seeking refuge on U.S. soil and in crypto-friendly jurisdictions like Texas and Wyoming.

Several U.S. authorities have taken action against individuals or entities linked to China through cryptocurrency. On October 3, the Treasury Department imposed sanctions on crypto wallets allegedly tied to the production of the drug fentanyl, involving various China-based chemical manufacturers. In July, allegations of crypto firm Prometheum’s ties to the Chinese government spurred calls for an investigation from six members of Congress.

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