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

An
American
bitcoin
mining
company,
CleanSpark
(CLSK),
got
caught
up
in
the
U.S.-China
political
war
after
buying
mining
sites
in
Wyoming
within
close
proximity
of
a
U.S.
nuclear
missile
base
from
MineOne,
a
company
with
Chinese
ties.

On
Monday,
President
Joe
Biden

ordered
a
bitcoin
mining
facility
near
Warren
Air
Force
Base
in
Wyoming
to
stop
operations,
citing
a
threat
to
national
security
as
it
uses
foreign-sourced
technology.
The
order
said
that
MineOne
is
majority-owned
by
Chinese
nationals,
and
all
mining
equipment
on
the
property
must
be
removed
from
within
a
mile
of
the
military
facility
in
Cheyenne,
which
houses
Minuteman
III
intercontinental
ballistic
missiles
(ICBMs).

While
this
may
not
be
a
surprising
move
in
itself,
the
timing
stands
out,
as
MineOne
sold
the
sites
to
CleanSpark
less
than
a

week
prior
to
the
order.

On
May
9,
CleanSpark
said
it
was
buying
two
mining
sites
for
nearly
$19
million
in
cash,
with
a
45-day
closing,
without
naming
a
specific
seller.
The
miner
said
it
will
deploy
China-based
Bitmain’s
latest
generation
mining
machine,
noting
that
it
plans
to
expand
the
sites
by
an
additional
55
megawatts
(MW)
from
75MW.

A
spokesperson
for
CleanSpark
said
the
company
was
unaware
of
the
order
prior
to
buying
the
mining
sites
but
acknowledged
the
concerns
in
the
executive
order
and
intends
to
press
forward
with
the
deal.

“The
executive
order
and
the
involvement
of
CFIUS,
both
of
which
we
were
unaware
of
before
signing
the
deal,
has
added
an
unexpected
layer
to
the
closing
process,
but
we
are
working
through
these
developments
toward
a
satisfactory
closing,”
the
spokesperson
told
CoinDesk
in
a
statement.

“We
respect
the
oversight
process
and
are
dedicated
to
ensuring
that
our
operations
bolster
national
security
and
benefit
economic
development,
particularly
in
Wyoming,
a
state
that
has
been
at
the
forefront
of
developing
and
nurturing
a
pro-Bitcoin
environment,”
the
statement
said.

Neither
MineOne
nor
lawyers
at
Loeb
&
Loeb
who
handled
the
property
deal
for
the
company
responded
to
requests
for
comment.

The
details
of
the
$19
million
deal,
though,
were

fully
described
in
filings
to
the
Securities
and
Exchange
Commission
(SEC)
from
CleanSpark.
The
purchase
was
highly
dependent
on
the
securing
of
massive
amounts
of
energy
required
to
run
the
business.

The
larger
of
the
two
properties
is
about
4,000
feet
from
the
closest
edge
of
Warren
Air
Force
Base.

From
MineOne,
the
sale
agreement
was
signed
by
Jiaming
Li,
identified
as
the
company’s
director.
Li,
who
couldn’t
be
reached
by
CoinDesk
for
comment,
has
also
been

president
of
China
Xiangtai
Food
Co.,
a
partner
in
TCC
Capital
and
reportedly
managed
almost
$12
billion
in
assets
at
Sinatay
Insurance
Co.

He
has
a
doctorate
in
economics
from
Fordham
University,
according
to
past
press
releases.
Li
was
also
briefly
the

president
of
Bit
Origin
Ltd.,
a
MineOne
investor
and
a
company
that
was
reported
to
have
garnered
similar
scrutiny

previously
from
Washington.

The
SEC-disclosed
contract
with
CleanSpark
outlined
a
due
diligence
period
extending
15
days
from
the
May
8
date
the
deal
was
signed,
and
the
purchase
could
be
scrapped
if
MineOne
didn’t
satisfy
several
conditions,
including
“government
compliance
matters.”

“I
have
been
deeply
involved
in
National
Security
affairs
for
nearly
four
decades,
and
am
well
aware
of
the
potential
risks
of
many
different
types
of
encroachment
on
important
defense
infrastructure,”
said
Tom
Wood,
a
CleanSpark
board
member
who
once
served
in
senior
U.S.
Navy
roles
and
as
a
military
analyst,
in
a
statement.
“The
presence
of
a
CCP-owned
data
processing
facility
near
a
facility
like
Warren
which
houses
a
portion
of
the
nation’s
ICBM
force
is
legitimate
cause
for
concern
as
noted
by
the
president’s
order.”

He
said
he’s
familiar
with
the
CFIUS
process,
calling
it
“impartial,
data-driven
and
non-arbitrary,”
and
he
said
that
if
the
U.S.
mining
business
can
address
the
concerns
in
the
order,
“I
would
consider
this
a
significant
win-win
for
the
United
States
and
for
CleanSpark.”

This
use
of
Committee
on
Foreign
Investment
in
the
United
States
(CFIUS)
powers
to
shut
down
the
acquisition
by
owners
tied
to
China
marked
the
eighth
such
use
of
CFIUS
–
seven
of
which
involved
China,
according
to
lawyers
at
Hogan
Lovells
who
specialize
in
this
issue.
Anne
Salladin
and
Brian
Curran
said
in
an
emailed
analysis
that
this
was
“the
first
presidential
prohibition
relying
on
the
expanded
authority
over
real
estate
transactions
granted
to
CFIUS
and
the
president
under
the
Foreign
Investment
Risk
Review
Modernization
Act
of
2018.”