Prominent cryptocurrency critic and U.S. Senator Elizabeth Warren has taken on digital asset miners, especially foreign-owned facilities, arguing that they pose environmental and national security risks.
At a recent hearing before the Senate Banking, Housing and Urban Affairs Committee, Warren questioned Paul Rosen, assistant secretary of the Treasury for Investment Security, about the threat these organizations pose to the United States.
Threat to the US homeland
Warren said one-third of cryptocurrency mining facilities in the United States are owned by Chinese nationals and individuals with direct ties to the Chinese government, arguing that these facilities could be used for espionage and threaten the U.S. energy sector, energy resources and energy supply chain. She cited a New York Times report that Chinese-owned bitcoin mining facilities in the U.S. consume enough energy to power 1.5 million homes.
Warren said these mining facilities emit noise and heat and “consume a lot of electricity,” which could strain the country's power demand. He called cryptocurrency mining an environmental disaster and said it also poses a national security risk.
“Foreign adversaries are using cryptomining to spy on U.S. military operations. This is a clear national security risk. But the risks don't end there. Foreign-owned cryptomining also poses a threat to our energy grid…”
“National security experts have warned that connecting foreign-owned crypto mining facilities to the U.S. power grid could make the country vulnerable to targeted power outages and cyberattacks,” the Politico report said.
Warren further explained that these foreigners were able to circumvent the traditional banking system and its anti-money laundering (AML) measures and acquire U.S.-based cryptocurrency mining facilities by paying in cryptocurrencies, stressing the need to “close the holes” by enforcing AML regulations in the cryptocurrency sector.
Senator Roger withdraws support for DAMLA
Senator Warren’s latest criticism of crypto miners comes after Senator Marshall Rodgers withdrew his support for the Digital Asset Anti-Money Laundering Act (DAAMLA), which he co-sponsored and introduced last year.
DAAMLA is an anti-cryptocurrency bill that aims to apply existing AML laws and the Anti-Terrorist Financing Network to the industry. It has the backing of several groups, including the Banking Policy Institute, the National District Attorneys Association and the Consumer Federation of America.
