US bitcoin miners disrupted by chinese supplier under scrutiny

Crypto miners in the US are experiencing delays receiving deliveries of new equipment, threatening their competitiveness and profit margins, as the Chinese juggernaut that supplies the bulk of their machinery comes under scrutiny amid a trade war.

Recent shipments of machines made by Beijing-based Bitmain Technologies to US clients have been delayed due to heightened Customs and Border Protection scrutiny, according to half a dozen industry executives. The delays coincide with the US Commerce Department’s blacklisting of Bitmain’s artificial-intelligence affiliate Xiamen Sophgo Technologies in January, when it accused the firm of “acting at the behest of Beijing to further the PRC’s goals of indigenous advanced chip production.”

It’s a situation that brings into conflict two of US president Donald Trump’s goals: gaining the upper hand on China in trade, and nurturing homegrown crypto miners to ensure Bitcoin is “Made in the USA.”

Bitmain, which claims a 90 percent share of the market for specialized computers used to mine Bitcoin, is already subject to tariffs imposed by Trump in 2018. The Republican announced an additional 10 percent levy on Chinese imports on Feb. 1.

“US Customs has started randomly inspecting almost all of the airlifted Bitcoin mining machines since about three months ago,” said Nuo Xu, founder of China Digital Mining Association, who operates mining sites in the US. Officers are looking more closely at machines, “while asking the brokers to show certificate of origin,” he added.

Bitmain provides the majority of the costly machines or “rigs” deployed by the largest US mining companies, such as MARA and CleanSpark, many of which are publicly traded. Mining in this context involves using specialized computers to solve mathematical puzzles for a chance to verify transactions and earn rewards in the form of Bitcoin.

New York-based Bit Digital has seen the delivery of 700 Bitcoin mining machines delayed by a couple of weeks, “which is not too much compared to the whole operation,” the firm’s chief executive Sam Tabar said. “We are one of the lucky ones.”

Another 20-megawatt operation in Oklahoma has 2,000 rigs held up because of more onerous Customs checks, according to a person familiar with the matter who asked not to be identified because the situation is sensitive. Ethan Vera, chief operating officer at Seattle-based crypto mining firm Luxor Technology, said shipments “with Bitmain miner labels” are among those being targeted.

The resulting logjam began as early as September but has been exacerbated in the past month, said Vishnu Mackenchery, director of global logistics and services at Compass Mining When machines that have been inspected are finally released to buyers, CBP charges a fee that can top half a million dollars depending on the number of rigs and how long they’ve been held, Mackenchery added.

Representatives for Bitmain and US Customs and Border Protection did not reply to requests for comment.

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