Biden Order to Halt China-Tied Bitcoin Mine Beside Nuke Base Came as U.S. Firm Just Bought it

As an analyst with extensive experience in geopolitics and national security, I am closely monitoring the developments surrounding CleanSpark’s acquisition of mining sites in Wyoming. The recent White House order to halt operations at a nearby bitcoin mining facility due to national security concerns adds an unexpected layer to this deal.

A US-based Bitcoin mining firm, CleanSpark (CLSK), found itself entangled in the complexities of the ongoing US-China political conflict following its acquisition of mining sites in Wyoming from MineOne, a company with reported links to China, situated near a United States nuclear missile installation.

On Monday, President Joe Biden issued an order to halt operations at MineOne, a Bitcoin mining facility situated close to Warren Air Force Base in Wyoming. The reason given was the potential risk to national security since the facility utilizes technology originating from foreign sources, specifically China. According to the directive, MineOne is predominantly owned by Chinese nationals, and all mining equipment within a mile radius of the military installation in Cheyenne, home to Minuteman III Intercontinental Ballistic Missiles (ICBMs), must be relocated.

As a researcher examining the recent business transactions, I find it noteworthy that MineOne disposed of certain sites to CleanSpark just days before the regulatory order was issued.

On May 9th, I came across CleanSpark’s announcement that they were purchasing two mining sites for approximately $19 million in cash, with a closing period of 45 days. The specific seller remained undisclosed. CleanSpark further mentioned their intention to utilize China-based Bitmain’s latest generation mining machines at these sites. Their expansion plans include increasing the power capacity by an additional 55 MW, bringing the total capacity to 125 MW.

CleanSpark’s representative stated that the company had purchased the mining sites without prior knowledge of the related executive order, yet they recognize the concerns raised in it and plan to move forward with the transaction.

“We weren’t anticipating the executive order and CFIUS involvement following the signing of the deal. These unexpected factors have added complexity to the closing process. However, we are diligently working through these developments to reach a satisfactory resolution.”

As an analyst, I recognize the importance of transparency and adherence to oversight processes. Our commitment is to strengthen national security through our operations, with a specific focus on contributing positively to economic growth, particularly in Wyoming – a pioneering state in fostering a supportive climate for Bitcoin development.

neither MineOne nor the legal team from Loeb & Loeb, who managed the real estate transaction for the firm, have provided a response to our inquiries.

In SEC filings, CleanSpark disclosed the intricacies of their $19 million transaction. The success of this deal hinged significantly on obtaining substantial energy resources for powering their operations.

The larger property is approximately 4,000 feet away from Warren Air Force Base’s border.

Jiaming Li, identified as the director of MineOne, signed the sale agreement with us. We were unable to get a comment from Li, who holds significant roles in China Xiangtai Food Co., TCC Capital, and reportedly managed around $12 billion in assets at Sinatay Insurance Co.

I’ve conducted research on this individual’s background and found that he holds a doctorate in economics from Fordham University, as mentioned in previous press releases. Additionally, Li served a brief tenure as the president of Bit Origin Ltd., an investor in MineOne. This company has previously drawn attention from regulatory bodies in Washington due to similar scrutiny.

Due diligence

The contract between CleanSpark and MineOne, as revealed by the SEC, allowed for a 15-day investigation period starting from May 8, the date the agreement was finalized. If MineOne failed to meet certain requirements during this time, such as government approval, the deal could be terminated.

Tom Wood, a seasoned expert with almost 40 years of experience in National Security matters, acknowledged the potential dangers of various kinds of intrusions on critical defense installations. In a statement, he voiced his awareness and shared concerns over the proximity of a Chinese Communist Party-owned data processing facility to a site like Warren, which safeguards a significant portion of the country’s Intercontinental Ballistic Missile (ICBM) arsenal. The president’s order rightly flagged this issue as deserving attention and scrutiny.

I’ve gained experience with the CFIUS process and describe it as fair, evidence-based, and unbiased. If the U.S. mining industry can effectively address the raised concerns in sequence, I believe this outcome would represent a considerable victory for both the United States and CleanSpark.

Hogan Lovells lawyers Anne Salladin and Brian Curran noted in an email analysis that this marked the eighth time such actions were taken by the Committee on Foreign Investment in the United States (CFIUS), with seven out of these eight instances involving China. This was also the first instance of a presidential ban utilizing CFIUS’s expanded authority over real estate transactions, granted under the Foreign Investment Risk Review Modernization Act of 2018.