Senator Elizabeth Warren (D-Mass.) has voiced concerns that foreign-owned cryptocurrency mining operations within the United States could pose significant threats to national security.
What Happened: Warren, known for her critical stance on the crypto industry, highlighted several risks during her questioning of Paul Rosen, Assistant Secretary for Investment Security at the Department of the Treasury.
During a Senate Committee on Banking, Housing, and Urban Affairs hearing on Thursday, Warren asserted that these mining operations could be exploited for espionage, grid disruption and covert financial transactions.
“Crypto mines could be used by our adversaries to spy on military bases, or to bring down the power grid, or move money in and out of the country in secret,” she stated.
The senator cited a blockchain analytics firm’s report claiming that a third of U.S.-based crypto mining operations are owned by Chinese citizens, some with direct ties to the Chinese government.
She referenced a recent case where President Joe Biden blocked a China-majority-owned mining company from operating near a Wyoming Air Force base due to national security concerns.
Rosen acknowledged the potential risks, stating, “Of course, an impact on our energy sector, our energy resources, our energy supply chain could very much have a national security impact.”
Warren also raised concerns about the ability of foreign nationals to bypass traditional banking systems by purchasing mining operations with cryptocurrency, potentially evading anti-money laundering rules.
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She called for stronger legislation to address these issues, saying, “It is time for us to pass laws, laws that the Treasury needs.”
This discussion comes at a time when Warren is actively building what she calls an “anti-crypto army” as part of her re-election campaign.
Her stance has drawn criticism from crypto advocates, with pro-crypto lawyer John Deaton announcing his bid to challenge her in the upcoming Senate race.
The senator’s concerns highlight the complex relationship between cryptocurrency, national security and regulatory oversight.
As the industry continues to evolve, these issues are likely to remain at the forefront of policy discussions.
What’s Next: For those interested in exploring these topics further, the upcoming Benzinga Future of Digital Assets event on Nov. 19 will provide a platform for industry experts, policymakers, and investors to discuss the implications of these developments on the future of cryptocurrency and blockchain technology in the United States.
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