US authorities are investigating Chinese Bitcoin mining hardware giant Bitmain over potential national security risks linked to alleged remote access features in its machines, according to a report by Bloomberg. The inquiry raises fresh concerns about the security of the American crypto mining sector, which relies heavily on Chinese-made ASIC devices.
Federal Investigation Into Alleged Remote Access Risks
The US Department of Homeland Security is leading a federal probe known as “Operation Red Sunset.” One US official and six individuals familiar with the matter told Bloomberg that investigators are examining whether Bitmain’s Bitcoin mining ASICs can be remotely accessed for espionage or to disrupt the US power grid.
Some units have reportedly been disassembled by investigators to detect any hidden or malicious capabilities. The sources did not confirm whether any such features were discovered.
Bitmain denied all allegations. A company spokesperson told Bloomberg that suggestions of remote control capabilities are “unequivocally false.” Bitmain added that it complies with all US laws, engages in no activity that threatens national security, and is unaware of the ongoing investigation.
Previous Scrutiny of Bitmain Linked Entities
This is not the first time US agencies have taken action involving Bitmain or its affiliates. In October 2024, authorities investigated Xiamen Sophgo, a Chinese chipmaker linked to Bitmain, over its supposed association with Huawei, a company under US sanctions.
One month later, US Customs officers halted the delivery of thousands of Bitmain ASICs. These shipments were only released in March this year after months of review.
Market Dominance Raises Industry Concerns
The potential fallout for the American crypto mining industry is considerable. According to a Cambridge study, Bitmain controls more than 80 per cent of the global Bitcoin mining ASIC market.
Chinese dominance is even stronger when combined with MicroBT, another leading manufacturer based in mainland China. Together, Bitmain and MicroBT hold about 97 per cent of the market.
Any restrictions on Bitmain devices would disrupt supply chains and significantly delay infrastructure expansion for US mining companies. The sector already experienced similar issues earlier this year when rising trade tensions between Washington and Beijing slowed ASIC shipments.
Possible Impact on Trump Family Linked Mining Firm
The investigation may also have political implications. American Bitcoin, a mining firm backed by members of President Donald Trump’s family, purchased 16,299 Bitmain Antminer U3S21EXPH units in August.
The company also took over almost all of Hut 8’s ASIC fleet, including more than 31,000 Antminer S21+ units acquired last year.
In September, American Bitcoin announced that it enjoys “preferential access to next generation ASIC compute infrastructure,” although it did not mention Bitmain by name.
Regulatory filings with the US Securities and Exchange Commission show that American Bitcoin paid Bitmain through pledged Bitcoin with a redemption window of 24 months, terms described as unusually favourable by The Guardian.
Industry Braces for Potential Disruption
With so many American mining firms dependent on Bitmain hardware, the outcome of the investigation could reshape the sector. Any restrictions could cause delays, increased costs, or a push towards alternative suppliers.
The probe also highlights broader geopolitical tensions as the US government intensifies scrutiny of Chinese technology across critical infrastructure sectors.
