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

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

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

“Cryptomining is a disaster for the environment, and it can pose national security risks as well.”

Elizabeth Warren, senator of the United States

Senator Warren recalled a divestment order issued in May 2024, following a CFIUS recommendation, to MineOne, a Chinese-owned mining facility that was built in Wyoming. The facility was situated just a mile away from the Francis E. Warren Air Force Base in Cheyenne.

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

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

Rosen agreed that such “sophisticated equipment” can be used for espionage.

Further, the Senator highlighted threats to the US electricity grid, claiming that these foreign entities could potentially cause “targeted blackouts and cyberattacks.”

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

According to Warren, crypto mining firms have used this strategy “to ‘secretly’ send millions of dollars back to China,” adding that it was time for the U.S. to enact legislation.

Warren’s recent warning follows a May letter to US officials regarding Iran’s use of crypto mining to “fund attacks against Israel.” In the letter, Warren asked for details on revenue generated by Iranian crypto miners and how the US plans to address the threat it poses.

The Biden government also initiated a crackdown on the cryptocurrency mining sector, proposing a 30% tax on electricity use by miners. The move was met with criticism, with Senator Cynthia Lummis, a Wyoming Republican, claiming it would “destroy” the sector.