Senator Elizabeth Warren has called for stricter regulations to address the risks posed by foreign-owned cryptocurrency mining facilities in the United States. She emphasized the environmental and national security threats, particularly from Chinese-owned operations, and emphasized the need for stronger laws to regulate crypto mining and prevent foreign exploitation.
During a hearing at the Senate Committee on Banking, Housing, and Urban Affairs, Senator Warren questioned Paul Rosen, Assistant Secretary for Investment Security at the Department of the Treasury, about the dangers posed by foreign-owned crypto mining facilities in the country. The hearing, which took place on July 25, focused on "Advancing National Security through Export Controls, Investment Security, and the Defense Production Act."
Senator Warren highlighted the environmental and national security risks associated with crypto mining facilities. She pointed out that one-third of these facilities in the United States are owned by individuals from the People's Republic of China, some of whom have direct connections to the Chinese government. According to the senator from Massachusetts:
"There is an increasing trend of foreign companies establishing cryptomining facilities on American soil."
She emphasized that these facilities, which are essentially warehouses filled with computers that process crypto transactions and generate new tokens, are noisy, hot, and consume massive amounts of electricity, which could potentially lead to power grid failures. Noting that many countries have already banned crypto mining, she argued that this has incentivized foreign companies to set up operations in the United States. According to a blockchain analytics firm, one-third of crypto mining facilities in the US are owned by individuals from the People's Republic of China, including those with direct ties to the Chinese government.
Warren continued, stating, "Cryptomining is not only harmful to the environment but also poses national security risks." She mentioned that in May, President Joe Biden issued an order requiring the Chinese owners of a crypto mining facility in Wyoming called Mineone to divest their ownership and remove the crypto mining equipment from the premises.
According to Warren, foreign nationals have been secretly purchasing US-based crypto mines using cryptocurrency, bypassing traditional banking and anti-money laundering regulations. For example, she mentioned that a Chinese investor acquired a $6 million crypto mine in Texas, and US crypto mines have been discreetly transferring millions of dollars back to China.
"Cryptomines could be exploited by adversaries to conduct surveillance on military bases, disrupt the power grid, or secretly transfer money across borders. Last year, the Treasury Department requested additional tools from Congress to prevent countries like China, Iran, and Russia from using crypto to evade sanctions and launder money," Warren concluded, emphasizing the need for action:
"It is time for us to pass the necessary laws to empower the Treasury."
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