National security concerns emerge over Chinese Bitcoin mine in Wyoming

National security concerns have been raised over a Chinese Bitcoin (BTC) mining operation in Cheyenne, Wyoming, and stakeholders believe it could pose a significant threat to critical military infrastructure in the United States.

The operation has caught the attention of US authorities who fear it may provide an opportunity for the Chinese government to engage in “full-spectrum intelligence collection operations,” The New York Times reported on October 13.

The crypto mining operation in question was brought to the US government’s attention when a team at Microsoft (NASDAQ: MSFT) submitted a report to the Committee on Foreign Investment in August 2022.

The team expressed concerns that the operation had the potential to collect sensitive information from the data center in Cheyenne, which plays a pivotal role in supporting the operational needs of the Pentagon. According to Microsoft:

“Microsoft has no direct indications of malicious activities by this entity. <…> However, pending further discovery, we suggest the possibility that the computing power of an industrial-level crypto mining operation, along with the presence of an unidentified number of Chinese nationals in direct proximity to Microsoft’s Data Center and one of three strategic-missile bases in the US, provides significant threat vectors.”

Areas of concern

US officials are also concerned the Chinese-owned mining plant could potentially be exploited to overwhelm electrical grids intentionally, causing planned blackouts or engaging in other cyberattacks. This has prompted growing concerns that the Chinese government is attempting to target and disrupt US military operations.

The Wyoming-based mine has raised eyebrows due to its proximity to the Francis E. Warren Air Force Base, which houses Intercontinental Ballistic Missiles (ICBMs). Interestingly, the operation is linked to five companies, one of which, Bit Origin Ltd., was previously registered as a pork-processing company in the Cayman Islands.

Li Jiaming, the president of Bit Origin Ltd., dismissed concerns that the mine’s location was related to intelligence collection, stating that it was chosen because a local utility company agreed to collaborate with the mining operation.

“Even though we are a Microsoft neighbor and a couple of miles from the base, without power, it is nothing — the business cannot succeed,” Jiaming said.

Notably, the latest concerns come after a previous report indicated that military officials had identified Chinese malware capable of disrupting power, water, and communication systems to military bases, reinforcing the worries about potential national security threats.

This development comes in the wake of China’s 2021 ban on resource-intensive Bitcoin mining practices, prompting several businesses in the cryptocurrency market to seek refuge in other countries, including the United States.