Bitmain, a major Bitcoin mining ASIC manufacturer based in China, is reportedly under investigation in the United States due to national security concerns.
Unspecified U.S. officials and six other anonymous people familiar with the matter said Bitmain’s hardware is at the center of a federal investigation known as “Operation Red Sunset,” according to a Bloomberg report on Friday. The investigation, led by the U.S. Department of Homeland Security, reportedly seeks to determine whether ASICs can be remotely controlled for purposes of espionage or to disrupt the U.S. power grid.
U.S. authorities previously investigated Xiamen Sofgo, a Chinese chip designer linked to Bitmain, in October 2024 for suspected business ties to Huawei, a company subject to U.S. sanctions. Following this, US Customs and Border Protection halted deliveries of thousands of Bitmain ASICs the following month. Officials only started releasing the hardware in March of this year.
The impact on the U.S. crypto mining industry could be far-reaching, as Bitmain controls more than 80% of the Bitcoin mining ASIC market, according to the Cambridge report. China’s dominance in the industry is even stronger, with both Bitmain and MicroBT, the second largest manufacturer based in mainland China, controlling 97% of the market share alone.
Distribution map of mining hardware by manufacturer. sauce: cambridge digital mining industry
Related: Bitmain to open first ASIC chip factory in the U.S.: Bloomberg
In some cases, law enforcement authorities have even disassembled Bitmain ASICs to look for malicious functionality, anonymous sources told Bloomberg. They declined to say whether anything was found.
A Bitmain spokesperson told Bloomberg that it was “patently false” that the company could control the machines remotely. Instead, a company representative claimed to have no knowledge of the investigation, saying it “strictly complies with U.S. and applicable laws and regulations and has never engaged in any activity that poses a risk to the national security of the United States.”
donald trump skin in game
Imposing restrictions on Bitmain machines is also likely to affect US President Donald Trump’s family. In August, American Bitcoin, a bitcoin mining company backed by Trump’s family, acquired 16,299 Antminer U3S21EXPH units from Bitmain.
Related: Bitcoin ASIC producer Canaan tests production in the US, withdraws from AI business
The company also inherited “substantially all” of the Hut 8’s ASICs. This includes 31,145 Bitmain Antminers S21+ machines acquired about a year ago.
American Bitcoin announced in September that it had “priority access to next-generation ASIC computing infrastructure,” without explicitly mentioning Bitmain. The US Securities and Exchange Commission (SEC) filing also revealed that US Bitcoin was “paid for through Bitcoin pledges” with “a redemption period of 24 months from the date of each pledge”, unusually generous terms as reported by the Guardian.
American Bitcoin is not the only major U.S.-based cryptocurrency mining company that could be affected by the findings, as Bitmain is so dominant in this space. The industry already had a sense of what was to come in mid-February, when publicly traded U.S. mining companies felt the impact of U.S.-China trade tensions through ASIC shipment delays.
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