US Congressman Calls for Probe Into Chinese Bitcoin Mining Firms Bitmain, Cango
A Republican lawmaker has urged the U.S. Treasury to launch a nationwide safety assessment of two China-linked firms concerned in Bitcoin mining {hardware}, citing issues over their rising footprint within the United States.
Key Takeaways:
- Lawmaker Zachary Nunn is asking for a assessment of Chinese mining corporations Bitmain and Cango over safety issues.
- Bitmain controls over 80% of the worldwide Bitcoin mining {hardware} market.
- Nunn warns that opaque possession and potential state ties warrant a CFIUS probe.
In a letter dated September 2 and reviewed by Bloomberg, Representative Zachary Nunn of Iowa requested Treasury Secretary Scott Bessent to analyze Bitmain Technologies Ltd. and Cango Inc., pointing to opaque possession constructions and potential hyperlinks to international state actors.
Nunn sits on the House Select Committee on the Chinese Communist Party, a panel tasked with assessing Beijing’s affect in key sectors.
Bitmain Controls 80% of Global Bitcoin Mining Machine Market, Cango Rising
Bitmain, based mostly in Beijing, is the world’s main provider of Bitcoin mining machines, accounting for over 80% of world distribution, based on a University of Cambridge report.
Cango, a Nasdaq-listed firm headquartered in China, has not too long ago been linked to Bitmain as a possible acquisition goal, claims Bitmain has publicly denied.
“Bitmain and Cango look like scaling operations within the U.S. by way of advanced possession constructions and financing preparations that is probably not absolutely clear to regulators or the general public,” Nunn wrote.
The congressman’s letter particularly requests that the Committee on Foreign Investment within the United States (CFIUS) open an inquiry into the 2 firms.
CFIUS has been central to earlier high-profile opinions, together with the TikTok investigation and the halted acquisition of Grindr.
Last yr, a CFIUS assessment led to President Biden prohibiting a crypto mining facility close to a strategic Air Force base in Wyoming over surveillance issues.
Nunn’s attraction arrives simply weeks after American Bitcoin Corp, a mining agency backed by Eric Trump, bought over $300 million price of mining machines from Bitmain’s US subsidiary.
Bitmain later clarified that it’s not pursuing possession of US energy infrastructure, countering experiences that the corporate could also be increasing into power markets.
Nunn cited dangers associated to Cango’s power utilization, doable affiliations with international governments, and broader issues over surveillance utilizing foreign-made chips.
Bitmain and Cango each instructed Bloomberg they adjust to U.S. legislation and preserve no ties to authorities entities.
While each corporations rejected hypothesis surrounding a merger, Nunn insisted a assessment is important to guard “American power, digital asset markets, and monetary sovereignty.”
Chinese Roots Still Dominate Global Bitcoin Mining
As reported, over half of the world’s Bitcoin mining operations still trace their origins to China, with 55% to 65% of mining linked to Chinese capital, {hardware}, or experience, based on Uminers CEO Batyr Hydyrov.
Despite China’s 2021 mining ban, key Chinese gamers have maintained affect by relocating operations abroad.
Major Chinese producers Bitmain, Canaan, and MicroBT, accountable for 99% of Bitcoin mining {hardware}, have shifted manufacturing to the U.S. to keep away from tariffs, serving to increase America’s share of Bitcoin’s whole hashrate from 4% in 2019 to 38% as we speak.
Hydyrov added that former Chinese miners have typically elevated capability after transferring overseas, with some increasing by as much as 150%, and famous that restricted mining nonetheless persists inside China’s distant areas the place enforcement is lax.
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