President Biden on Monday ordered a Chinese-owned company to close and sell the Wyoming cryptocurrency mine it built a mile from an Air Force base that controls nuclear-armed intercontinental ballistic missiles.

The cryptomining facility, which operates high-powered computers in a data center near the FE Warren base in Cheyenne, “presents a risk to the national security of the United States,” the president said in a executive orderbecause their equipment could be used for surveillance and espionage.

The New York Times reported Last October, Microsoft, which operates a nearby data center that supports the Pentagon, flagged the China-connected cryptocurrency mine to the Federal Committee on Foreign Investment in the United States, warning that it could allow the Chinese to “pursue intelligence collection from full spectrum operations.” A committee investigation identified risks to national security, as ordered by the president.

The order did not detail these risks. But Microsoft’s report to the federal committee, obtained last year by The Times, said: “We suggest the possibility that the computing power of an industrial-grade cryptomining operation, coupled with the presence of an unidentified number of Chinese nationals in direct proximity to Microsoft. The Data Center and one of three strategic missile bases in the US provide significant threat vectors.”

Now, the mine must immediately cease operations, and owners must remove all of their equipment within 90 days and sell or transfer ownership within 120 days, according to the order, which cites the risks of mining equipment. “of foreign origin” of the installation. The vast majority of machines powering cryptomining operations in the United States are manufactured by Chinese companies.

Cryptomining operations are carried out in large warehouses or containers filled with specialized computers that typically run 24 hours a day, performing trillions of calculations per second, searching for a sequence of numbers that will reward them with new cryptocurrencies. The most common is Bitcoin, which is currently worth more than $60,000 each. Crypto mines consume a huge amount of electricity: At full capacity, Cheyenne’s would consume as much energy as 55,000 homes.

Chinese-owned cryptocurrency mines have boomed in the United States since facilities were effectively banned in China in 2021. While some cryptocurrency mining has since restarted in China, Chinese crypto entrepreneurs are drawn to the United States for its relatively cheap electricity and well-developed legal legislation. system.

The Times discovered Chinese-owned or operated Bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas and Wyoming, which together use as much energy as 1.5 million homes. Some are owned by people or companies linked to the Chinese government or the Communist Party. Until recently, the main supplier of equipment to the mines operated from an office at a Communist Party facility on Hainan Island, The Times has learned.

President Biden’s order comes on the heels of signing a bipartisan bill in late April to ban the social media app TikTok in the United States unless its Chinese owner sells it.

This is also the second time in recent weeks that Chinese-owned cryptomining operations have been targeted by elected officials.

This month, Republican Arkansas Governor Sarah Huckabee Sanders signed two laws restricting foreign ownership of crypto operations in the state. The legislation prohibits ownership of crypto mines by foreign citizens of China, Iran, Cuba and other countries subject to State Department rules known as the International Traffic in Arms Regulations.

Arkansas has seen a large influx of Bitcoin mining operations in recent years. In October, The Times reported that Chinese investors with ties to the authoritarian government operated at least three mines in Arkansas. A former employee linked to the operations wrote about the exploration of “more than 200 target mining sites” in more than 10 states.

O laws Restricting ownership of crypto operations in Arkansas aims to amend last year’s so-called Right to Mine law, which offered broad protections to the industry while limiting local regulation and triggered a violent backlash among residents near mines. One such operation, with links to Chinese citizens, is the target of a lawsuit filed by residents who say the incessant whining of thousands of fans cooling computers has ruined their lives and depressed property values. In addition to the new restrictions on noisy operations, the amended law requires that cryptocurrencies held anywhere by foreign citizens subject to arms regulations be completely disposed of within one year.

Mr. Biden’s order is directed at an offshore company called MineOne Partners Limited and related MineOne entities registered in Delaware. A lawsuit against MineOne by a Wyoming cryptocurrency company has forced the disclosure of its owners, who included Chinese nationals. In 2022, Bit Origin Ltd., a former Chinese pork producer that turned to cryptocurrency mining, became a partner in a MineOne entity and built the mine, which began operating in early 2023.

Li Jiaming, president of Bit Origin Ltd., was not immediately available for comment. In an interview last year, Li said the investors chose the location because they had secured a contract with the local power company to supply their electricity, not because of its proximity to the base or data center.

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