U.S. Customs is releasing seized mining equipment owned by Chinese sellers, ending a four-year war on crypto and releasing the necessary equipment to realize President Trump’s vision of a crypto industry in America . In November 2023, U.S. Customs and the Federal Communications Commission (FCC) seized Bitcoin mining equipment, arguing that the chips contained restricted technology from the Chinese chip company Sophgo. At the time, U.S. Customs and the FCC said that the chips may have contained radio interference, but this seemed like an excuse for targeting Chinese technology. Ethan Vera, COO of Luxor Technology, said that although some equipment has been released, many remain detained. Sophgo, a Chinese company, owns most of the machines. The U.S. claims that Sophgo was secretly working with Huawei, and that this warranted a seizure because the latter is a blacklisted company. American authorities claim that this supposed link justified the seizure because it was hard for them to clear the equipment. Sophgo has denied having a business relationship with Huawei. One company has said that it is now being charged a holding fee for the seizure of its machines. It owns 200 ASICs and now has a bill worth $200,000. In total, around 10,000 mining machines were seized at various U.S. ports. Some retailers claim that their equipment was valued at $5 million. However, some Chinese ASICs were not seized by officials and continued to make their way to American retailers. These seizures present a problem for Trump’s plan to make America the crypto capital of the world. The disruption of mining equipment could limit the Bitcoin hashrate and impede the market growth of cryptocurrencies. President Trump has pushed hard to support Bitcoin mining in America. He has even stated that he wants the remaining Bitcoin mined in America. The U.S. Department of Commerce’s Bureau of Industry and Security is responsible for setting a strategy against Chinese mining requirements. They have created a set of rules for dealing with advanced semiconductors, focusing on crypto and AI and preventing Chinese progress. The problem, however, is that China supplies around 98% of all chips used in crypto mining. The largest manufacturer, Bitmain, has expanded operations in the U.S., focusing mainly on increased delivery speeds. Bitmain has made a public statement, saying that it is confident in its progress and that it will benefit industry partners in America. Despite a large percentage of chips produced in China, around 38% of Bitcoin’s hashrate is based in America. Therefore, crypto’s success seems to be based on Chinese American collaboration. However, the U.S. and China are locked in a trade war, with America focusing on competing for AI and military dominance. America has an advantage with chip design. China has a manufacturing advantage and is making much progress in research and development. Huawei, a leading company in AI, has been blacklisted by America, limiting the amount of companies it can source from. This is not a new problem because the U.S. has blocked Huawei for a long time. This is why Huawei has an extensive Research and Development programme, because they have to make their products from scratch. However, this has only benefited Huawei because it now has cutting-edge technology and an experienced team of innovators.
