Bitcoin News Today: US Probes if Bitmain's Hardware Could Sabotage Power Grid, Spark Espionage Fears

The U.S. government has launched a sweeping investigation into Bitmain Technologies Ltd., the Chinese manufacturer that supplies most of the world's Bitcoin-mining hardware, over concerns that its products could pose national security risks, including espionage or sabotage of critical infrastructure. The probe, dubbed "Operation Red Sunset," is being led by the Department of Homeland Security (DHS) and involves agencies including the Federal Communications Commission and the National Security Council. The effort follows warnings from the Senate Intelligence Committee, which flagged Bitmain's devices as potentially exploitable for surveillance or grid disruption.

The investigation focuses on whether Bitmain's mining machines, widely used in U.S. data centers, can be remotely manipulated from China to surveil or destabilize the American power grid. U.S. officials have reportedly conducted physical inspections of seized Bitmain equipment at ports, testing their chips and firmware for malicious capabilities. The probe also examines potential tariff violations and whether the company's ties to the Chinese Communist Party (CCP) create unacceptable risks. A Senate Intelligence Committee report in July highlighted "disturbing vulnerabilities" in Bitmain's hardware, noting its frequent deployment near high-energy-demand sites like military bases and power plants.

Bitmain has denied allegations that it can remotely control its devices, calling such claims "unequivocally false" and asserting compliance with U.S. laws. The company also stated it "has no awareness" of the Operation Red Sunset investigation and attributed past equipment detentions to routine FCC checks. However, the Senate report directly linked Bitmain's operations to the CCP, warning that its machines "have the capability to be remotely controlled by Bitmain personnel in China" and that their presence near sensitive installations "is an unacceptable risk."

The scrutiny has intensified amid growing political tensions. Bitmain's hardware has become central to a new venture backed by Donald Trump's sons, Eric and Donald Trump Jr. Their firm, American Bitcoin Corp., purchased 16,000 Bitmain machines in August for $314 million, using Bitcoin as collateral. The transaction has drawn attention to potential conflicts of interest, as the Trump family expands its cryptocurrency holdings while the administration relaxes crypto regulations. American Bitcoin claims it conducts "rigorous security tests" on its hardware and asserts that the devices pose no credible threat to U.S. infrastructure when operated under modern security protocols.

The investigation underscores broader concerns about China's influence in the crypto sector. In 2024, President Joe Biden's administration blocked a Bitcoin mining facility near a Wyoming nuclear missile base, citing risks from foreign-owned equipment. Last year, the Committee on Foreign Investment in the United States (CFIUS) also raised alarms about Bitmain's proximity to military sites. Meanwhile, the Commerce Department recently blacklisted Bitmain's AI affiliate, Sophgo Technologies, for alleged dealings with Huawei.

DHS has declined to comment on the ongoing probe, stating it "does not comment on open and active investigations." A senior administration official confirmed that the government remains "vigilantly monitoring" threats but provided no update on the status of Operation Red Sunset. The outcome could shape U.S. policy toward China's dominance in crypto infrastructure and influence regulations for the $1 trillion digital asset industry.