U.S. Authorities Begin Releasing Seized Chinese-Made Crypto Mining Equipment

U.S. authorities have recently begun releasing previously seized Chinese-made cryptocurrency mining equipment, according to two industry executives who spoke with Reuters.

Cryptocurrency miners—powerful computers equipped with advanced chips—compete to solve complex mathematical puzzles, a process that supports blockchain networks and generates rewards in the form of new digital currency.

“Thousands of units have been released,” said Taras Kulyk, CEO and co-founder of Synteq Digital, a company that brokers cryptocurrency mining equipment. At one point, up to 10,000 units were stuck at various ports of entry, Kulyk told Reuters.

“Apparently there were some folks in the CBP that really didn’t like bitcoin mining so they wanted to give the entire sector a headache, which they did quite well,” he said.

U.S. Customs and Border Protection (CBP) and the Federal Communications Commission (FCC) began seizing certain bitcoin mining machines late last year, according to a report from industry publication Blockspace in November. The report suggested that at least some of the detained equipment may have been flagged due to containing chips from Sophgo, a Chinese chipmaker under trade restrictions.

Ethan Vera, chief operating officer of Luxor Technology, told Reuters that “some held shipments are being released, but right now that is still a minority of them.” Both Vera and Kulyk stated that authorities had expressed concerns over the radio frequency emissions of the machines, though they dismissed these concerns as unfounded.

Sophgo was sanctioned in the final months of the Biden administration for allegedly acting as an intermediary between high-end Taiwanese chipmaker TSMC and the blacklisted Chinese telecom company Huawei in October.