Benzinga - President Joe Biden has issued an order to prohibit and require the divestment of a cryptocurrency mining facility operated by MineOne, a company significantly owned by Chinese nationals.
What Happened: The facility is notably situated within a mile of the Francis E. Warren Air Force Base in Cheyenne, Wyoming, a critical site for the United States’ strategic missile operations and home to Minuteman III intercontinental ballistic missiles.
The decision, announced on May 13, came after a thorough review by the Committee on Foreign Investment in the United States (CFIUS), which investigated the transaction under the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).
This Act extends CFIUS's oversight capabilities to real estate transactions near sensitive U.S. facilities.
“Today's divestment order underscores President Biden's steadfast commitment to protecting the United States' national security,” stated Secretary of the Treasury Janet L. Yellen.
She emphasized the critical role of CFIUS in safeguarding national interests against foreign investments that pose risks to sensitive U.S. military installations and involve specialized technologies.
The proximity of the MineOne facility to the airbase and the use of specialized, potentially foreign-sourced mining equipment raised significant national security concerns, highlighting the potential for surveillance and espionage.
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The review process led to the Presidential directive for the immediate removal of the equipment and reversal of improvements made on the property.
Paul Rosen, Assistant Secretary of the Treasury for Investment Security, pointed out the rigorous standards CFIUS maintains in such evaluations.
“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,” Rosen asserted.
He also stressed the importance of providing complete, accurate, and timely information during such reviews, especially when national security is at stake.
The case against MineOne was heightened when it was revealed that the firm did not initially file the transaction with CFIUS and was only brought to the committee’s attention through a public tip.
This led to a deeper investigation into the non-notified transaction, underscoring the enhanced capabilities given to CFIUS under FIRRMA to manage such cases.
What’s Next: This incident illuminates the broader implications of cryptocurrency and its intersection with global security interests, a topic that will be explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.
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