Bitmain, a leading manufacturer of application-specific integrated circuits (ASICs) for Bitcoin mining, is under investigation in the US over national security concerns. According to a report by Bloomberg, the US Department of Homeland Security is leading the investigation, known as “Operation Red Sunset,” to determine whether Bitmain’s ASICs could be remotely controlled to spy on or sabotage the US power grid.
The investigation has sparked concerns about the potential risks of using Bitmain’s hardware, which dominates the Bitcoin mining ASIC market with over 80% market share, according to a report from Cambridge. The Chinese company’s dominance in the industry, along with fellow Chinese manufacturer MicroBT, has raised eyebrows, with the two companies controlling 97% of the market share alone.
Mining hardware distribution chart by manufacturer. Source: Cambridge Digital Mining Industry
Investigation and Potential Consequences
The investigation has already led to some consequences, with US Customs and Border Protection stopping the shipment of thousands of Bitmain ASICs in November 2024. The hardware was only released in March 2025, after a prolonged delay. The consequences for the US crypto mining industry could be far-reaching, with many companies relying on Bitmain’s hardware for their operations.
A Bitmain spokesman has denied any wrongdoing, stating that the company “strictly complies with U.S. and applicable laws and regulations and has never engaged in any activity that poses a risk to U.S. national security.” However, investigators have reportedly dismantled Bitmain ASICs to look for malicious capabilities, although it is unclear whether anything was found.
Donald Trump’s Family Ties to Bitmain
The investigation has also raised questions about the potential consequences for the family of US President Donald Trump, who have invested in a Bitcoin mining company that uses Bitmain’s hardware. American Bitcoin, a company backed by members of Trump’s family, acquired a fleet of 16,299 Antminer U3S21EXPH units from Bitmain in August.
The company has also inherited “substantially all” of Hut 8’s ASICs, including 31,145 Bitmain Antminers S21+ machines. The terms of the deal, which include a repayment period of 24 months, have been described as unusually generous. The potential consequences of the investigation for American Bitcoin and other US crypto mining companies that rely on Bitmain’s hardware are still unclear.
Industry Implications and Next Steps
The investigation into Bitmain has significant implications for the US crypto mining industry, which is already facing challenges due to US-China trade tensions. The delay in the delivery of ASICs in mid-February has already had an impact on US-listed mining companies. As the investigation continues, it is likely that the industry will face further challenges and uncertainties.
For more information on the investigation and its potential consequences, visit https://cointelegraph.com/news/bitcoin-asic-producer-bitmain-faces-us-probe-over-national-security-risks-bloomberg?utm_source=rss_feed&utm_medium=rss_tag_regulation&utm_campaign=rss_partner_inbound
