Bitcoin
Biden’s order to halt China-linked Bitcoin mine next to nuclear base came as US company just bought it
An American bitcoin mining company, CleanSpark (CLSK), has been caught up in the US-China political war after purchasing mining sites in Wyoming, in the vicinity of a US nuclear missile base, from MineOne, a company with Chinese ties.
On Monday, President Joe Biden ordered a bitcoin mining facility near Warren Air Force Base in Wyoming to halt operations, citing a threat to national security as it uses foreign-sourced technology. The order said that MineOne is majority-owned by Chinese nationals and that all mining equipment on the property must be removed from within a one-kilometer radius of the military facility in Cheyenne, which houses Minuteman III intercontinental ballistic missiles (ICBMs).
While this may not be a surprising move in and of itself, the timing stands out as MineOne sold the sites to CleanSpark for less than a week before ordering.
On May 9, CleanSpark said it was buying two mining sites for nearly $19 million in cash on a 45-day deadline, without naming a specific seller. The miner said it will deploy China-based Bitmain’s next-generation mining machine, noting that it plans to expand the sites by an additional 55 megawatts (MW) from 75 MW.
A spokesperson for CleanSpark said the company was not aware of the order before purchasing the mining sites, but acknowledged the concerns in the executive order and intends to move forward with the deal.
“The executive order and the involvement of CFIUS, which we were not aware of prior to signing the agreement, added an unexpected layer to the closing process, but we are working on these developments toward a satisfactory close,” the spokesperson told CoinDesk in a affirmation.
“We respect the oversight process and are committed to ensuring that our operations enhance national security and benefit economic development, particularly in Wyoming, a state that has been at the forefront of developing and nurturing a pro-Bitcoin environment,” stated the communicated.
Neither MineOne nor the Loeb & Loeb lawyers who ran the company’s real estate business responded to requests for comment.
Details of the $19 million deal, however, were fully described in CleanSpark’s Securities and Exchange Commission (SEC) filings. The purchase depended heavily on obtaining the enormous amounts of energy needed to run the business.
The larger of the two properties is about 4,000 feet from the nearest boundary of Warren Air Force Base.
From MineOne, the sale agreement was signed by Jiaming Li, identified as the company’s director. Li, who could not be reached by CoinDesk for comment, was also President of China Xiangtai Food Co.partner at TCC Capital and reportedly managed nearly $12 billion in assets at Sinatay Insurance Co.
He has a doctorate in economics from Fordham University, according to previous press releases. Li was also briefly the President of Bit Origin Ltd., an investor in MineOne and a company that would have received similar scrutiny previously from Washington.
The contract released by the SEC with CleanSpark outlined a due diligence period that extends 15 days from the date the deal was signed on May 8, and the purchase could be canceled if MineOne did not meet several conditions, including “government compliance issues.”
“I have been deeply involved in Homeland Security matters for nearly four decades and am well aware of the potential risks of many different types of intrusions into important defense infrastructure,” said Tom Wood, a CleanSpark board member who previously served in the Navy. from the USA. functions and as a military analyst, in a statement. “The presence of a CCP-owned data processing facility near a facility like Warren, which houses a portion of the nation’s ICBM force, is a legitimate cause for concern, as noted in the President’s order.”
He said he is familiar with the CFIUS process, calling it “impartial, data-driven and non-arbitrary,” and said that if the U.S. mining business can resolve the concerns in the order, “I would consider that a significant win.” for the United States and for CleanSpark.”
This use of the powers of the Committee on Foreign Investment in the United States (CFIUS) to terminate acquisitions by Chinese-linked owners marked the eighth time the president has used the authority – seven of which involved China, according to lawyers at Hogan Lovells. on this issue. Anne Salladin and Brian Curran said in an emailed analysis that this was “the first presidential ban based on the expanded authority over real estate transactions granted to CFIUS and the President under the Foreign Investment Risk Review Modernization Act of 2018.” .