Senator Elizabeth Warren has called for stricter regulations to address the risks of foreign-owned cryptocurrency mining facilities in the U.S. She highlighted the environmental and national security threats, especially from Chinese-owned operations, and stressed the importance of stronger laws to regulate crypto mining and prevent foreign exploitation.
Senator Warren Calls for Tougher Regulations to Combat National Security Risks From Foreign Crypto Mines
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Senator Warren Raises Concerns Over Foreign-Owned Crypto Mining Facilities
At a Senate Committee on Banking, Housing, and Urban Affairs hearing, U.S. Senator Elizabeth Warren (D-MA) questioned Paul Rosen, Assistant Secretary for Investment Security at the Department of the Treasury, about the threats posed by foreign-owned cryptocurrency mining facilities in the United States. This hearing, held on July 25, focused on “Advancing National Security through Export Controls, Investment Security, and the Defense Production Act.”
Senator Warren underscored the environmental and national security risks of crypto mining facilities, noting that one-third of these facilities in the U.S. are owned by citizens of the People’s Republic of China, some with direct ties to the Chinese government. The senator from Massachusetts stated:
Increasingly, foreign companies are building cryptomining facilities on U.S. soil.
She stressed that these facilities, essentially warehouses filled with computers that process crypto transactions and produce new tokens, are noisy, hot, and consume enormous amounts of electricity, potentially crashing the power grid. Noting that many countries have banned crypto mining, she asserted that this prompted foreign companies to establish operations in the United States. According to a blockchain analytics firm, one-third of crypto mining facilities in the U.S. are owned by citizens of the People’s Republic of China, including individuals with direct ties to the Chinese government.
“Cryptomining is a disaster for the environment, and it can pose national security risks as well,” Warren continued, adding that in May, President Joe Biden “issued an order requiring the Chinese national owners of a cryptomining facility in Wyoming called Mineone to divest their ownership and remove the cryptomining equipment from the premises.”
According to Warren, foreign nationals have secretly bought U.S. crypto mines using cryptocurrency, bypassing traditional banking and anti-money laundering regulations. For example, a Chinese investor acquired a $6 million crypto mine in Texas, and U.S. crypto mines have transferred millions of dollars back to China discreetly, she said.
“Cryptomines could be exploited by adversaries to spy on military bases, disrupt the power grid, or clandestinely transfer money across borders. Last year, the Treasury Department requested more tools from Congress to prevent countries like China, Iran, and Russia from using crypto to evade sanctions and launder money,” Warren concluded, emphasizing:
It is time for us to pass the necessary laws to empower the Treasury.
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