Chinese Bitcoin mining hardware giant Bitmain is reportedly under investigation by United States authorities over national security concerns. According to a Bloomberg report, the probe centers on allegations that the company’s widely used mining equipment could be remotely controlled for espionage or to disrupt critical infrastructure.

Operation Red Sunset

The federal investigation, known as “Operation Red Sunset,” is being led by the US Department of Homeland Security. Citing anonymous officials, the report states that authorities are working to determine if Bitmain’s application-specific integrated circuit (ASIC) miners contain backdoors that could allow for spying or sabotage of the US power grid. Investigators have reportedly gone as far as disassembling the hardware to search for malicious capabilities, though no findings have been disclosed.

This probe follows previous actions against the company. In October 2024, US authorities investigated the Bitmain-linked chip designer Xiamen Sophgo over an alleged business relationship with the sanctioned company Huawei. The following month, US Customs and Border Protection halted the delivery of thousands of Bitmain ASICs, which were only released starting in March 2025.

Bitmain Denies Allegations

A spokesperson for Bitmain told Bloomberg that the claim it can remotely control its machines is “unequivocally false.” The representative stated that the company “strictly complies with US and applicable laws and regulations and has never engaged in activities that pose risks to US national security,” adding that Bitmain was unaware of the investigation.

Widespread Industry Impact

The outcome could have significant consequences for the American crypto mining industry, as Bitmain controls over 80% of the Bitcoin ASIC market. When combined with the second-largest manufacturer, MicroBT, Chinese companies command an estimated 97% of the global market share.

Potential restrictions could also affect American Bitcoin, a mining company backed by members of President Donald Trump’s family. The firm recently acquired a fleet of 16,299 Antminer units from Bitmain and inherited over 31,000 more from its merger with Hut 8. Filings with the Securities and Exchange Commission (SEC) also revealed unusually generous payment terms for the company.

The US mining industry has already felt the effects of geopolitical tensions. In mid-February, publicly traded mining companies experienced significant delays in receiving their ASIC shipments due to trade disputes between the United States and China, highlighting the sector’s reliance on a concentrated supply chain.