US Officials Worry Chinese-Owned Bitcoin Mine In Wyoming Could Be Used For Planned Blackouts, Cyberattacks

A Bitcoin mining operation of Chinese origins in Cheyenne, Wyoming, is currently the cause of concern among U.S. government officials, particularly those in the Pentagon, since it could be used for planned blackouts and other cyberattacks that could pose a significant national security threat, according to a report.

The New York Times report said that the U.S. government was initially unbothered by the Bitcoin mine in Wyoming, but Microsoft submitted a report to the Committee on Foreign Investment in August 2022, warning the agency of the potential risk of the operation, particularly in terms of collecting information from the data center. It could enable the Chinese to "pursue full-spectrum intelligence collection operations" targeted at its data center, as well as the Francis E. Warren Air Force Base, which houses inter-continental ballistic missiles (ICBMs).

While Microsoft's report did not explicitly state any malicious activity of the Bitcoin mine, it suggested "the possibility that the computing power of an industrial-level cryptomining 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."

Furthermore, U.S. officials reportedly raised concern over the possibility of the Bitcoin mine being exploited to intentionally overwhelm electrical grids, which could result in unplanned blackouts or other cyberattacks, further triggering concerns that the Chinese government is trying to target and disrupt the country's military operations.

Additionally, the U.S. military had recently identified Chinese malware in the wild, capable of disrupting communication, water, and power systems to military bases, further fueling worries about the potential national security threat the mine poses.

The Bitcoin mine in Cheyenne is reportedly linked to five companies that use the same Park Avenue, Manhattan office. One of the five companies was registered in the Cayman Islands, and according to the Times, was a pork processing company until last year.

But Bit Origin Ltd.'s President Li Jiaming tried to ease these concerns by saying that the adjacent U.S. military base or the Microsoft data center had nothing to do with why they chose the location of its Bitcoin mining operation.

The executive claimed that the Bitcoin mine was built in the area because a local utility company partnered with Bit Origin, the team behind the BTC mine in Cheyenne.

"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 noted.

China has banned Bitcoin mining since 2021, triggering Chinese companies to look elsewhere for their base of operations. The country's share in global mining capacity nosedived to zero in July following the cryptocurrency crackdown launched by its authorities.