U.S. Senator Elizabeth Warren has issued a stark warning about the national security risks posed by foreign-owned cryptocurrency mining operations on American soil. Speaking at a Senate Committee on Banking, Housing, and Urban Affairs hearing on July 25, Senator Warren highlighted the potential dangers these facilities could pose to the United States.
National Security Concerns
Senator Warren expressed serious concerns about foreign crypto miners, particularly pointing out their environmental and national security impacts. She stated, “Foreign companies building crypto mining facilities on U.S. soil are a disaster for the environment and can also pose national security risks.”
One specific facility, Chinese-owned MineOne, was located just a mile away from a strategic missile base in Wyoming before President Biden ordered its removal in May. Warren warned that such facilities could be used for espionage, adding, “Foreign adversaries are using cryptomines to spy on U.S. military operations. That is an obvious national security risk.”
Energy Grid Vulnerability
Warren also raised alarms about the potential threats these operations pose to the U.S. energy grid. She claimed that the high electricity consumption of these mining facilities could lead to power grid failures. “They’re loud, they’re hot, and they suck up a ton of electricity, which can crash the power grid,” Warren noted. She further cautioned that foreign-owned crypto mines’ connection to the energy grid could leave the U.S. vulnerable to targeted blackouts and cyberattacks.
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Financial and Regulatory Concerns
In addition to security and environmental issues, Warren criticized the financial practices of these foreign entities. She asserted that they have been acquiring mining facilities secretly by paying in cryptocurrency, thereby bypassing the traditional banking system and Anti-Money Laundering (AML) rules. “This is also how U.S.-based crypto mines have been able to secretly send millions of dollars back to China,” Warren claimed, urging for legislative action.
Contrasting Perspectives on Crypto Mining
While Warren’s stance highlights the perceived dangers of crypto mining, other perspectives suggest that crypto mining can benefit energy grids by balancing load and increasing renewable electricity capacity. A research paper published in November 2023 pointed out that crypto mining’s interruptibility and swift load response capabilities could enhance power grid flexibility.
Despite these potential benefits, the Biden administration has taken a hard stance against the crypto mining industry. In April, it ordered a crackdown on the industry, citing China’s restrictive measures as an example to follow in its ongoing regulatory efforts.
