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 per cent share of the market for specialised computers used to mine Bitcoin, is already subject to tariffs imposed by Trump in 2018. The US president announced an additional 10 per cent 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 Holdings and CleanSpark, many of which are publicly traded. Mining in this context involves using specialised computers to solve mathematical puzzles for a chance to verify transactions and earn rewards in the form of Bitcoin.
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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 CEO 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 US 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.
Mining capital
The US became a fulcrum for the crypto mining sector after a 2021 ban in China, but American alternatives to Bitmain’s signature Antminer machine have been slow to emerge. As of August 2024, the six most profitable rigs on the market by operating margin were made by Bitmain.
Fears over geopolitical risks stemming from the booming US mining industry began to surface in 2024.
In May, former President Joe Biden ordered a Chinese Bitcoin mining company called MineOne to vacate and sell a 12-acre property near Cheyenne, Wyoming. One of the reasons was the presence of “specialised and foreign-sourced equipment” used to mine cryptocurrency – but “potentially capable of facilitating surveillance and espionage activities,” the Committee on Foreign Investment in the US said in a statement at the time.
Reuters reported in October that Taiwan Semiconductor Manufacturing Company had suspended shipments to Bitmain’s AI affiliate Sophgo after a chip it made was found on a Huawei AI processor. The company issued a statement denying any direct or indirect relationship with TSMC. It was later blacklisted by the Bureau of Industry and Security at the US Commerce Department.
Such headwinds coupled with the fresh wave of tariffs have seen the gross weight of imported Bitcoin mining rigs and accessories tumble nearly 65 per cent in January on a year-over-year basis, according to CBP data compiled by research firm TheMinerMag. In the long-term, this may threaten the competitiveness of US firms, which must continually upgrade their machinery to outdo their rivals.
“Heavier tariffs would essentially halt importation of new generation hardware into the US, making it completely cost-prohibitive,” said Taras Kulyk, CEO at Synteq Digital, one of the largest mining machine brokers. “There will be a tonne of projects that will cease construction because they wouldn’t be able to get the hardware.”
To make matters worse, a recent slump in activity on the Bitcoin network is squeezing the fees miners earn by verifying transactions. Such fees currently represent just 1.2 per cent of miners’ total revenues, down from a peak of 75 per cent last year, according to CryptoQuant data.
Skirting tariffs
Bitmain is no stranger to such challenges. The company set up production lines in Indonesia, Malaysia and Thailand to skirt US tariffs on China established in Trump’s first term, Bloomberg News reported previously.
On Dec 9, Bitmain announced the launch of a US facility, without divulging its exact location. “This strategic move aims to provide faster response times and more efficient services to the North American customers,” the firm said in a post on X. It’s a move that highlights the mounting complexity faced by the business, which is also dealing with steadily increasing competition from rivals such as MicroBT, in China, and California-based Auradine.
“I would expect any company buying Bitmain’s machines is going to be at risk right now, including the public ones,” said Luxor’s Vera. BLOOMBERG
