Federal investigation examines whether Chinese-made Bitcoin mining hardware poses threats to U.S. infrastructure
A new federal investigation has placed Bitmain, the world’s largest Bitcoin ASIC manufacturer, under intense scrutiny in the United States. According to reports, U.S. authorities are probing whether the company’s mining hardware could pose national security risks, particularly through alleged remote-access capabilities that might enable surveillance or disruption of critical power systems. With Bitmain controlling the majority of the global ASIC market, the probe carries significant implications for the American crypto mining industry.
Federal Authorities Launch “Operation Red Sunset”
Sources familiar with the matter say the U.S. Department of Homeland Security is leading the investigation, named Operation Red Sunset, aimed at determining whether Bitmain’s machines can be accessed or manipulated remotely. Investigators have reportedly disassembled units to search for hidden functionalities that might compromise U.S. infrastructure.
government source described the concern as “a necessary response to safeguard critical energy systems at a time when digital hardware plays a central role in national operations.”
The core fear is that remotely controlled ASICs could be exploited for espionage or to disrupt the U.S. power grid.
Bitmain strongly rejects the allegations, stating that the claims are “unequivocally false” and insisting the company has never engaged in activities that threaten U.S. national security.
Chinese Dominance in ASIC Manufacturing Raises Stakes
A Cambridge industry report shows that Bitmain controls over 80% of the global Bitcoin mining ASIC market, while the combined footprint of Bitmain and MicroBT reaches an overwhelming 97%. This near-monopoly means any disruption tied to the investigation could ripple throughout U.S. mining operations.
An industry analyst noted, “The United States is deeply dependent on Chinese-made ASICs. Any restrictions or seizures create immediate delays, hardware shortages, and uncertainty for mining companies.”
The U.S. previously halted thousands of Bitmain machines in late 2024 during an investigation into chip designer Xiamen Sophgo, only releasing them months later. February’s delays already showed how quickly trade tensions can disrupt mining firms relying on constant hardware upgrades.
Unexpected Political Complications
The situation carries political sensitivities as well. American Bitcoin, a mining company backed by members of President Donald Trump’s family, recently purchased more than 16,000 Bitmain Antminer units. It also inherited over 31,000 Bitmain machines from Hut 8, making the company heavily exposed to any future restrictions.
Filings indicate American Bitcoin has unusually favorable payment terms, leading market observers to question the potential fallout if the U.S. tightens controls on Chinese mining hardware.
The investigation into Bitmain represents one of the most consequential national security probes yet within the crypto sector. With the U.S. mining industry reliant on Chinese-made ASICs, any findings—positive or negative—will shape the country’s mining capabilities, supply chains, and policy direction for years to come. If federal agencies confirm risks, the U.S. may be forced to rethink its hardware dependence overnight.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.