The US government has opened a security review into Bitmain, the Beijing-based manufacturer that sells most of the world’s Bitcoin mining rigs. A months-long federal investigation, known internally as Operation Red Sunset, has been probing whether Bitmain’s machines can be remotely steered for spying or used to interfere with the American power grid. The question sounds abstract, the kind of thing that belongs in a classified memo. But the answers land in very ordinary places: repair benches in North Dakota, shipping yards in Oklahoma, and the upgrade calendars of every miner who depends on Chinese hardware.
Before you can follow what breaks, you have to understand what Washington is actually doing.
Inside Operation Red Sunset
According to documents reviewed by Bloomberg and people familiar with the matter, Red Sunset has been running across several agencies for roughly two years. Homeland Security is in the lead, with support from the National Security Council. The goal of the investigation is to determine if Bitmain rigs can be controlled from the outside in a way that makes them useful for espionage or sabotage.
Federal agents have already gotten touchy with hardware. Some Bitmain shipments were stopped at US ports and pulled apart on inspection tables, their chips and firmware examined for hidden capabilities. Officials also looked at tariff and import questions, blending security worries with more routine trade enforcement.
In an emailed statement to Bloomberg, the company called it “unequivocally false” to say it can remotely control machines from China, and said it complies with US law and doesn’t engage in activity that threatens national security. It also said it has no awareness of any investigation called Operation Red Sunset and that past detentions of its hardware were tied to Federal Communications Commission concerns, where “nothing out of the ordinary was found.”
Officials are not debating this in a vacuum. A Senate Intelligence Committee report has already flagged Bitmain devices as vulnerable and open to manipulation from China. A few years ago, researchers found Antminer firmware that allowed remote shutdown; Bitmain framed that as an unfinished anti-theft feature and later patched it, but the episode left a mark.
Red Sunset also sits on top of a concrete case. In 2024, the US government forced a Chinese-linked mining operation near a missile base in Wyoming to shut down because of national security risks tied to thousands of rigs at that site. The hardware was similar, the geography far more sensitive.
So the government is looking at Bitmain as more than a vendor. It is treating the company as an infrastructure player that lives close to the grid and sometimes close to strategic locations. That is how you end up with an ASIC manufacturer in the same document set as telecom companies and power equipment.
And all of this is unfolding while Bitmain deepens its ties to a very visible American client.
America’s mining machine is full of Bitmain metal
In March, a small, relatively unknown listed firm announced it would spin out a new Bitcoin mining venture with Eric and Donald Trump Jr. as investors. The new business, called the American Bitcoin Corp, wants to be the “world’s largest, most efficient pure-play Bitcoin miner” and plans to run 76,000 machines across Texas, New York, and Alberta. To get that insane number of miners, it turned to Bitmain.
Corporate filings show American Bitcoin agreed to buy 16,000 Bitmain rigs for $314 million. Instead of paying cash or tapping traditional debt, the company pledged 2,234 BTC to secure the hardware. The structure is unusual enough that a former SEC enforcement attorney told Bloomberg the terms probably belong in more detailed disclosure.
That one deal captures the dependency problem in miniature. A high-profile miner, tied to the president’s family, is staking thousands of Bitcoin and ambitious growth targets on a Chinese supplier that sits inside a national security investigation. Officials already worry that the arrangement creates conflicts of interest for an administration that wants to turn the US into the “crypto capital of the world.”
But, despite the crazy amount of power they want to put into mining Bitcoin, the president’s sons are just a drop in a very, very large sea. Over the last decade, US miners have installed hundreds of thousands of Bitmain units across the country. The business of creating new Bitcoin in North America rests almost entirely on the shoulders of Antminers, powered by chips and code that were never designed with this level of geopolitical heat in mind.
So when you ask what happens “if Bitmain gets hit,” you are really asking what happens when the central vendor in that stack runs into federal policy, not just market risk.
What breaks first if Washington swings
Every serious miner runs a pipeline of dead hardware. Because fans fail, power supplies blow, and hashboards burn. Some of that can be handled in-house, but a large chunk is pushed through authorized repair centers that live inside the Bitmain ecosystem. The company lists overseas and regional repair hubs that cover the US market, with shipping lanes that loop through places like Arkansas, North Dakota, and Oklahoma.
That pipe is very fragile and the most likely to break first. If the US government opts for hard measures, such as putting Bitmain or key affiliates on an entity list or imposing targeted sanctions, the easiest lever to pull is at the border. Spare parts could sit in temporary warehouses until they get to customs for “review.” A process that used to take days could stretch into weeks while lawyers and compliance teams sort through new rules.
For a single mining operation, the effect will show up slowly. Availability would drop a few points as more machines sit dark waiting for parts, and the on-site pile of failed units would continue to grow. Operators with deep pockets will, of course, be able to stockpile spares and hedge with a second vendor. But smaller miners, who bought a few containers of rigs with structured financing and do not have a warehouse full of backup boards, will be the ones to feel real stress real fast.
Next in line would be the headline orders.
If Red Sunset ends with softer measures, such as additional licensing for specific chips or mandatory export reviews, Bitmain might still ship S21 and T21 orders into the US, just on a slower schedule. A miner who expected six-week lead times could easily face three or more months for delivery, plus paperwork. If the outcome is tougher, and Bitmain ends up restricted from supplying certain US buyers, those orders could easily turn from scheduled capacity into open questions.
Because the sector is heavily financed, time wasted is not just time wasted: it’s time plus interest, covenants, and equity guidance. A public miner that has told investors it would reach a certain exahash number by a specific quarter now has to explain why the gear is stuck somewhere between Shenzhen and Houston.
As soon as uncertainty hits the new-machine pipeline, the secondhand market lights up. Older Antminers that were being run down toward retirement suddenly look attractive, as long as their efficiency is not too far off the curve. MicroBT and Canaan, Bitmain’s main competitors, watch their sales teams get very busy very fast.
But they don’t have a magic warehouse full of high-efficiency gear either. They have their own production bottlenecks, chip allocations, and promised deliveries. If US miners try to pivot en masse, lead times on alternative hardware extend as well. Some of that gap will be filled with gray routes, rigs shipped through third countries, or bought from intermediaries that can still access Bitmain stock without tripping US rules.
Three paths from here
From the outside, it’s tempting to think in binary terms: either Bitmain is banned or nothing happens. In practice, there are three broad paths.
In the first, Red Sunset fades quietly. DHS keeps watching, maybe files some internal recommendations, and the government decides that the current industrial security practices, network segmentation, and firmware audits are enough to manage the risk. Bitmain remains politically awkward but commercially available. Miners diversify a bit more into MicroBT and Canaan, yet the basic structure of the US fleet stays intact, and hash rate growth keeps following something close to its current course.
In the second, Bitmain is pushed into a managed box. That could mean formal mitigation agreements where the company has to meet strict firmware attestation standards, submit to third-party audits, and confine certain repair and assembly work to vetted onshore partners. Exports might require extra licenses, and high-risk sites, such as those near sensitive grid infrastructure or military facilities, could face special rules.
That version is annoying rather than catastrophic for miners. Lead times will stretch, legal costs rise, and engineers spend more time proving that their operations meet whatever new security bar Washington sets. Hardware will still flow, of course, just with more friction and a higher all-in cost per installed terahash.
The third path is the one everyone in operations dreads: sanctions or an entity list designation that bites directly into sales, firmware support, and dollar clearing. In that world, Bitmain equipment becomes toxic for regulated US buyers almost overnight. Repair centers struggle to move parts across borders. Software updates are frozen in a legal gray area. Existing fleets can still run, but their owners have to think very hard about how long they want to stay dependent on a vendor that can’t service or upgrade their machines.
Hash rate wouldn’t collapse, because this isn’t not Huawei in the core network. But growth plans would bend. Quite a bit of capacity that was supposed to plug into American grids during the next two quarters would slip or move abroad, and the narrative that Bitcoin mining is becoming a US-heavy, grid-friendly industry would start to look a little thinner.
Why this matters beyond mining Twitter
On the surface, this is a niche story about customs holds, but underneath, it’s a test of how the US treats the physical infrastructure of Bitcoin.
Washington has already decided that mining locations can matter, as Wyoming learned when its Chinese-linked facility near a missile base was shut down. It has a live probe into Bitmain’s hardware, with agents tearing down rigs and lawyers debating whether Chinese-made ASICs should be treated more like telecom gear than gaming cards. And it has a presidential family whose flagship mining venture is tied, by contract, to that same supplier.
If the government backs away or leaves with just a slap on the wrist, the message is that Bitcoin’s industrial layer can live with high scrutiny but still function inside a global hardware market. If it pushes Bitmain into a restricted box, the message is very different. Miners will read it as the start of a broader campaign to localize or at least de-risk key parts of the mining stack.
For everyone else, the stakes sit one abstraction higher. The security budget that protects Bitcoin is paid through these machines. The more expensive, complicated, and politically fraught it becomes to operate them in the US, the more of that budget shifts somewhere else.
The headline question is what breaks first inside the mining machine if Bitmain gets hit. The quieter question is whether the US wants those machines humming along its own power grid or prefers to push them back out into someone else’s backyard.
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