Key Takeaways
- CBP is delaying Bitmain ASIC shipments, possibly due to an FCC investigation into the potential use of restricted Sophgo chips.
- US Bitcoin miners are facing rising costs and operating delays as a result of extended equipment holds.
- The situation highlights regulatory risks and the United States’ reliance on Chinese-made mining hardware.
Blockspace reported on November 25 that US Bitcoin mining businesses are experiencing severe delays as a result of the Customs and Border Protection (CBP) agency holding shipments of Bitmain Antminer devices at several ports of entry.
The detained equipment comprises Bitmain’s S21 and T21 application-specific integrated circuits (ASICs), which are required for Bitcoin mining.
Several mining businesses have reported waiting up to two months for the equipment, with one alleging holding costs of more than $200,000 for 200 units.
The CBP is apparently acting at the request of the Federal Communications Commission (FCC). However, the exact grounds for the enforcement action are unknown.
The FCC’s Investigation Linked to the Sophgo Chip Used in Bitmain Devices.
The detentions, which have lasted months in certain situations, impact major ports such as San Francisco and Detroit. Several Bitcoin mining businesses have reported lengthy delays and uncertainty about when the cargo would be distributed.
According to sources, the FCC order may be related to an investigation into the components used in Bitmain’s ASIC miners, notably the Sophgo CV1835 chip.
“CBP holds extending beyond 30 days with no clear requests from the Importer of Record (IOR) are beyond usual service standards and extremely rare,” one source said, according to the article.
The investigation was begun when chips manufactured in Taiwan were reportedly used in Huawei processors. Huawei has long been a target of national security investigation, having been sanctioned by the United States since 2019.
While the CBP has targeted Bitmain shipments, other Chinese manufacturers’ ASICs have not been detained. Personnel from the Advanced Targeting Unit, who are in charge of detecting high-risk cargo, are allegedly present in some ports’ holds.
Sophgo is now under investigation for potential links to Huawei, which has been facing US sanctions since 2019. However, according to the article, there is no formal confirmation linking the delays to this probe.
Companies Face Mounting Costs Due to Prolonged Shipment Holds
Some impacted firms have expressed worry about the CBP and FCC’s lack of communication. They claim to be charged significant storage costs, with one firm reporting racking up over $200,000 in storage fees while waiting for clearance on 200 pieces of equipment. With no clear resolution in sight, these mounting costs are adding even more pressure to an already difficult situation.
Industry sources have advised that the FCC and CBP investigate the detained units for the usage of banned hardware. Bitmain has employed a number of vendors for its components; thus, not all units in the concerned models will have the Sophgo chips in issue.
“It’s worth noting that Bitmain sources control boards from a variety of vendors, so just because a Bitmain used the CV1835 chip for some models, it does not mean that every unit of that model houses the chip in question,” according to the investigation report.
Broader Implications
The issue shows the difficulties that US miners face when relying primarily on mining equipment made in China. It is to be noted that the majority of the chips used in crypto mining are manufactured in China, with Bitmain dominating the industry.
Despite trade limitations, Bitmain has moved to broaden its worldwide presence by creating offices outside of China to avoid tariffs and diversify its operations.
The delivery embargo has also reignited debates over China’s influence in the cryptocurrency market. While Beijing outlawed cryptocurrency mining domestically in 2021, Chinese-owned enterprises continue to mine Bitcoin in the United States, complicating the legal environment.
As expenses grow and operational delays increase, industry participants are looking for clarification from authorities. Both the CBP and the FCC have yet to issue public remarks on the detained shipments.
Conclusion
Bitcoin miners in the U.S. are facing big problems as Customs and Border Protection (CBP) delays shipments of Bitmain ASIC machines. These delays are driving up costs and causing some miners to hinder operations.
The issue also raises concerns about relying so much on equipment made in China. Miners are urging regulators to communicate more clearly and help fix the problem. Until then, the industry will continue to deal with rising expenses and uncertainty, making it even harder to stay competitive.
