Elizabeth Warren Raises Alarms Over Foreign Crypto-Mining Operations

By: Isha Das

US lawmaker Senator Elizabeth Warren has amplified her stance against cryptocurrencies, raising significant national security and environmental concerns during a recent Senate Committee on Banking, Housing, and Urban Affairs hearing. On July 25, she stressed that foreign-owned crypto-mining operations might be used to spy on the United States military, posing a serious national security threat.

She stated, "Foreign adversaries are using cryptomines to spy on US military operations. That is an obvious national security risk. Foreign-owned cryptomines also threaten the energy grid." In addition to these concerns, Warren further criticized the environmental impact of these mining operations, describing them as a potential ecological disaster.

The Senator painted a dire picture of these facilities, describing them as 'warehouses stuffed with computers' that are noisy, hot, and consume vast amounts of electricity, potentially destabilizing the power grid. Warren noted that the high energy demands of these operations led several countries to ban crypto mining to protect their energy resources and environment.

Warren also discussed the financial and anti-money laundering concerns arising from foreign nationals purchasing crypto mines in the US using cryptocurrency, thereby bypassing traditional banking systems and regulations. She cited an example of a Chinese investor who secretly acquired a $6 million crypto-mine in Texas using digital assets, accentuating the risks of anonymous funding.

Money Laundering Concerns

The anti-crypto lawmaker explained that foreign nationals have often managed to buy up cryptomines in the United States by circumventing traditional financial systems, posing significant financial threats. She noted: "Foreign nationals have been able to buy up cryptomines in the United States in secret. How? By paying in crypto. Crypto allows them to bypass our traditional banking system and the anti-money laundering rules that are supposed to prevent any anonymous foreign money from coming into the US."

In her urgent call for action, Warren recommended Congress to tighten anti-money laundering laws to prevent anonymous funding and protect national interests. Her fears are rooted in examples like a Chinese investor purportedly using digital assets to secretly purchase a substantial crypto mining operation in Texas.

Thinning Support Base

Despite her fervent advocacy, Warren's anti-crypto base appears to be dwindling. Notably, Republican Senator Roger Marshall withdrew his support for the Digital Asset Anti-Money Laundering Act (DAAMLA) bill on July 24. Official records from Congress indicate that Marshall, who co-sponsored the bill with Warren in 2022, has backed out, leaving 18 lawmakers still in favor of the legislation.

While Warren claims the bill aims to align the digital asset ecosystem with existing anti-money laundering regulations, industry advocates argue that the legislation is a strategic move to impede the growth of the digital asset sector. Marshall has not provided public comments on his decision, but some market observers attribute it to the increasing significance of cryptocurrency in the current electoral landscape.