Bitmain, the leading China-based manufacturer of Bitcoin mining application-specific integrated circuits (ASICs), is being investigated in the US over national security concerns.
According to a Bloomberg report on Friday, an unspecified US official and six other unnamed people familiar with the matter said Bitmain hardware is at the center of a federal investigation known as “Operation Red Sunset.” The investigation, led by the US Department of Homeland Security, reportedly seeks to determine whether ASICs could be remotely controlled to spy on or sabotage the US power grid.
US authorities previously investigated Bitmain-linked Chinese chip designer Xiamen Sophgo over an alleged business relationship with US-sanctioned company Huawei in October 2024. This followed the US Customs and Border Protection Agency stopping the delivery of thousands of Bitmain ASICs the following month. Authorities only began rolling out the hardware in March of this year.
The consequences for the US crypto mining industry could be far-reaching, as Bitmain controls more than 80% of the Bitcoin mining ASIC market, according to a Cambridge report. Chinese dominance in the industry is even tighter, with both Bitmain and the second largest manufacturer, MicroBT, based in mainland China, alone controlling 97% of the market share.
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In some cases, researchers even disassembled Bitmain’s ASICs to search for malicious capabilities, anonymous officials told Bloomberg. They declined to say whether anything was found.
A Bitmain spokesperson told Bloomberg that it is “unequivocally false” that the company is able to control its machines remotely. Instead, the company representative states that it “strictly complies with US and applicable laws and regulations and has never engaged in activities that pose risks to US national security.” and is unaware of the investigation.
Donald Trump’s skin in the game
Imposing restrictive measures on Bitmain machines is also likely to have consequences for US President Donald Trump’s family. In August, a Bitcoin mining company backed by members of the Trump family, American Bitcoin, acquired a fleet of 16,299 Antminer U3S21EXPH units from Bitmain.
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The company also inherited “substantially all” of Hut 8’s ASICs. This includes the 31,145 Bitmain Antminers S21+ machines it acquired about a year ago.
In September, American Bitcoin announced that it has “preferential access to next-generation ASIC computing infrastructure,” without explicitly citing Bitmain. Filings from the US Securities and Exchange Commission (SEC) also reveal that American Bitcoin “paid by pledging Bitcoin” with a “24-month repayment period from each pledging date,” terms that The Guardian says are unusually generous.
Given that Bitmain is so dominant in the space, American Bitcoin is far from the only major US-based crypto mining company that may be affected by the findings of this investigation. The industry already got a taste of what could happen when, in mid-February, publicly traded mining companies in the US felt the effects of trade tensions between the United States and China through delays in receiving shipments of their ASICs.
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