Crypto miners near any U.S. Military Base fall under CFIUS scrutiny

The U.S. Treasury Department has finalized a rule to tighten scrutiny on foreign property near military installations, which affects crypto mining. This comes after the United States president weighed in to stop a China-tied crypto operation near a nuclear missile base.

According to an official report, international real estate deals near key US military bases will now face enhanced government inspection under a new law. MineOne was in the process of being acquired by the US firm CleanSpark (CLSK) when it encountered national security concerns raised by the Committee on Foreign Investment in the United States (CFIUS).

CFIUS and the U.S. Department of Defense have issued that final rule to “foreign persons near more than 60 military bases and installations across 30 states.” According to Secretary of the Treasury Janet L. Yellen: 

“The Biden-Harris Administration will continue to use our strong investment screening tools to advance America’s national security and protect our military installations from external threats […] This final rule will allow us to deter and stop foreign adversaries from threatening our Armed Forces, including through intelligence gathering.”

Janet L. Yellen

“Today’s final rule is a significant milestone in safeguarding critical U.S. military and defense installations,” said Assistant Secretary for Investment Security Paul Rosen. 

As per the statement sent out by the US Treasury Department, the final rule enhances CFIUS’s authorities through the following key changes:

First, it expands CFIUS’s jurisdiction over certain real estate transactions to include those within a one-mile radius of 40 new military facilities. Then, it expanded CFIUS’s authority over certain real estate transactions to include those within a 100-mile radius of 19 more military facilities.

In addition, CFIUS’s jurisdiction runs over certain real estate transactions between 1 mile and 100 miles around eight military installations already listed in the regulations. Lastly, it has been tasked with updating the names of 14 military installations already listed in the regulations to better assist the public in identifying the relevant sites.

U.S. blocks China-tied crypto miners near a nuke base

Earlier in May, President Joe Biden ordered the Bitcoin mining facility near Warren Air Force Base to stop operations. Biden cited a threat to national security as it uses foreign-sourced technology.

According to the White House order, the British Virgin Islands company behind MineOne, which is majority-owned by Chinese nationals, stood suspicious. 

The Bitcoin mining firm was ordered to remove all the improvements and mining equipment on the property located within a mile of the military facility in Cheyenne. This base houses Minuteman III nuclear missiles. President Biden said that:

“The proximity of the foreign-owned Real Estate to a strategic missile base and key element of America’s nuclear triad, and the presence of specialized and foreign-sourced equipment potentially capable of facilitating surveillance and espionage activities, presents a national security risk to the United States.”

President Joe Biden

MineOne, which bought the property in 2022, was accused of buying the land and starting work there without filing with CFIUS. According to the White House, a tip prompted a probe into the acquisition.

The presidential order, which also authorized the U.S. attorney general to “take any steps necessary” to enforce it, cited the “presence of specialized equipment on the property used to conduct cryptocurrency mining operations, some of which is foreign-sourced and presents significant national security concerns,” according to a related statement from the Department of the Treasury.

According to Secretary of the Treasury Janet L. Yellen, President Biden’s divestment order underscored “the critical gatekeeper role that CFIUS serves to ensure that foreign investment does not undermine our national security, particularly as it relates to transactions that present risk to sensitive U.S. military installations as well as those involving specialized equipment and technologies.”