US authorities are scrutinising Chinese Bitcoin mining giant Bitmain over concerns that its hardware may pose national security risks, as per a Bloomberg report.

The probe has drawn attention across the crypto mining industry, which relies heavily on the company’s equipment.

Investigation by the Department of Homeland Security

The investigation, known internally as “Operation Red Sunset,” is being led by the Department of Homeland Security.

Sources cited by the publication say the inquiry centres on whether Bitmain’s machines have hidden remote-control capabilities that could be used for spying or to disrupt parts of the US power grid.

Late last year, US Customs and Border Protection paused shipments of Bitmain hardware, and thousands of ASIC units were held before being gradually released in March.

As per the report, investigators even disassembled some ASICs to check for malicious components, though officials have not disclosed what they found.

However, Bitmain, in a statement quoted in the report, strongly rejected the allegations.

The company also said it is unaware of any ongoing investigation.

American Bitcoin caught in the crossfire

The investigation also touches on a politically sensitive area. American Bitcoin, a mining firm backed by members of President Donald Trump’s family, has purchased thousands of Bitmain machines.

In August, the company acquired more than 16,000 Antminer U3S21EXPH units.

It also inherited tens of thousands of Bitmain S21+ devices through a previous acquisition.

The company has signalled it has access to next-generation ASIC infrastructure.

SEC filings show that American Bitcoin purchased equipment using pledged Bitcoin.

Because of Bitmain’s dominance, American Bitcoin is only one of many US miners that could face ripple effects from the investigation.

Some companies already felt pressure earlier this year when US–China trade tensions delayed ASIC shipments.

Chinese dominance in mining hardware

The probe comes at a time when the global mining sector is significantly dependent on Chinese manufacturers.

A Cambridge study shows that Bitmain controls over 80% of the Bitcoin ASIC market.

Together with rival MicroBT, also based in China, the two firms hold about 97% of the global market share.

This overwhelming dominance leaves US miners with few alternatives if restrictions or further delays arise.

Any disruption to the supply of new ASICs could slow expansion plans and raise operational costs for American mining companies.

Industry braces for fallout

Many mining firms are now watching the developments closely since the possibility of sanctions, import restrictions, or new security requirements could reshape the hardware landscape in the United States.

Some companies are exploring domestic suppliers, though the US chip sector has not yet produced a competitive alternative to Chinese mining rigs.

For now, federal officials have not offered a timeline for the probe, leaving miners waiting for clarity as they weigh expansion plans and navigate rising energy costs.

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