On May 13, Joe Biden, the US President, took some steps to safeguard national security interests. He has issued an executive order prohibiting mining operations and will also require the removal of certain improvements and equipment from the property by MineOne Partners Limited.
The crypto mining facility is located within one mile of Francis E. Warren Air Force Base (F.E. Warren AFB) in Cheyenne, Wyoming. The order will lead to the divestment of crypto-mining facilities.
Reasons for Biden’s drastic move
The subject property was acquired by MineOne Partners Limited, a company primarily owned by the nationals of the People’s Republic of China, in June 2022. After the acquisition, MineOne made improvements to the property to make it appropriate for specialized cryptocurrency mining operations.
The mining facility’s proximity to F.E. Warren AFB, a strategic missile base, forced the Committee on Foreign Investments in the United States (CFIUS) to investigate acquisition transactions. It was done under the guidance of authorities granted by the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).
white house blocks #bitcoin mining firm “ultimately majority owned by Chinese nationals” MineOne Cloud Computing from acquiring and operating on ~12 acres due to proximity strategic USAF missile base in Wyoming pic.twitter.com/hjDuPAZDKT
— Alex Thorn (@intangiblecoins) May 13, 2024
Janet L. Yellen, secretary of the Treasury, emphasized the impact of divestiture on the industry in the country and national security interests. She underscored CFIUS’s crucial role in ensuring U.S. national security, especially concerning transactions posing risks to sensitive military installations that involve specialized technologies.
Risk Identification by CFIUS
The organization identified national security risks associated with the acquisition, including facility proximity and the presence of specialized equipment used for the cryptocurrency mining operations.
Some of this equipment is sourced from outside the commercial boundaries of the USA. These have forced CFIUS to raise these concerns in front of the president.
However, most crypto market observers and technicians supported Biden’s decision. However, Matthew Green (@matthew_d_green), a cryptography teacher, said, “This is weird.” to its 146.4K followers.
This is weird. https://t.co/7KGlaU7Elv
— Matthew Green (@matthew_d_green) May 14, 2024
Reaction of Joe Biden
The president directly ordered the divestment of foreign ownership of the property and the removal of equipment and improvements added to the property since the acquisition.
The CFIUS has the authority to negotiate a mitigation agreement; it determined that such measures would not adequately address the security risks.
Paul Rosne, the Assistant Secretary of the Treasury for Investment Security, said, “If CFIUS parties are unwilling or unable to fully address national security risks, CFIUS won’t hesitate to exercise the full scope of its authorities, including Presidential referrals, to address the risk.” The statement represents the commitment of the body.
Further updates and actions
Then, it was revealed that MineOne did not file the transactions with CFIUS until the committee’s non-notified team investigated the transaction following a public tip. CFIUS’s non-notified function, improved by authorities provided by Congress in FIRRMA, supports the body’s ability to identify and review non-notified transactions.
CFIUS is authorized to enter into negotiated mitigation agreements only if they are practical, verifiable, and monitorable. In this case, the committee determined that it would be impossible to enter into a negotiated agreement with MineOne that sufficiently addressed the national security risks, resulting in the presidential referral.
Based on the facts and national security risks related to this transaction, the decision underscores CFIUS’s commitment to encourage foreign investment while protecting national security interests.
The committee exclusively focuses on identifying and addressing national security concerns on a case-by-case basis. It will reinforce the committee’s objective to safeguard national security while promoting foreign investment.
