Foreign crypto mining operations pose espionage risk, warns Senator Warren

United States Senator Elizabeth Warren has warned about the risks of foreign cryptocurrency mining farms operating in the nation. The warning is in line with the current White House administration’s stance.

Speaking at a July 25 hearing, Senator Warren stressed that cryptocurrency mining firms owned by foreign entities threaten national security.

She also raised concerns about ecological risks, claiming these entities are a “disaster for the environment” and can “crash the power grid.”

Foreign-owned crypto miners pose national risks 

When asked whether these concerns relate to all foreign mining entities in the US, Warren cited risks of espionage.

Foreign companies allegedly use “cryptomines to spy on US military operations,” the senator replied. 

She was particularly referring to a mining farm in Wyoming owned and operated by the Chinese entity MineOne. The site was located close to a US missile base and was ordered to be removed in May.

Senator Warren continued:

That is an obvious national security risk. But it isn’t the only risk. Foreign-owned cryptomines also threaten the energy grid.

According to the senator, the risks go beyond just high electricity consumption, which is a common cause of concern regarding crypto mining. Foreign-owned crypto miners connected to the US power grid present the risk of “targeted blackouts and cyberattacks.”

Further, the lawmaker alleged that foreign entities have been acquiring sites in the US “in secret. She took a stab at cryptocurrencies, labelling them a tool that allows these entities to “bypass” the banking system and “the Anti-Money Laundering rules.”

She referred to the case of Jerry Yu, a New York University student who acquired a Bitcoin mine in Texas in 2023 for over $6 million. 

Reports suggested that the transaction was carried out in cryptocurrency, resulting in the property coming under regulatory surveillance.

As such, Warren concluded:

It is time for us to pass laws, laws that Treasury needs.

Cracking down on crypto mining

This isn’t the first time Senator Warren rang the alarm on crypto mining. In May, she sent a letter to the Secretary of Defense, Secretary of the Treasury, and the National Security Advisory regarding Iran’s use of crypto mining to bypass US sanctions.

The letter, penned alongside Senator Angus King (I-Maine), asked US officials to provide data on revenue generated by Iranian crypto miners, their potential use in money laundering, and how they plan to address the issues.

Meanwhile, the Biden administration has also taken an aggressive approach to regulating the mining sector, with the proposal of a 30% excise tax on the cost of electricity used for Bitcoin mining.

The post Foreign crypto mining operations pose espionage risk, warns Senator Warren appeared first on Invezz