US authorities begin releasing some seized cryptocurrency miners, industry executives say

By AJ Vicens and Raphael Satter

DETROIT, March 5 (Reuters) – U.S. authorities have in recent weeks begun releasing seized Chinese-made equipment used for cryptocurrency mining, two industry executives told Reuters.

Cryptocurrency miners – basically souped-up computers with advanced chips – compete with one another to solve mathematical puzzles, a process which helps build the blockchains underpinning the cryptocurrency world and earn 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 cryptocurrency mining equipment broker. At one point as many as 10,000 units had been 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 and the Federal Communications Commission began seizing certain bitcoin mining equipment late last year, industry publication Blockspace reported in November. The publication said at least some of the machines may have been detained because they carried chips from the trade-restricted Chinese chip company Sophgo.

The release of an undetermined amount of equipment comes amid the ongoing trade war between the U.S. and China as well as security concerns raised by U.S. authorities dating to the waning months of the Biden administration. 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 said authorities raised concerns around radio frequency emissions from the machines, which they said were groundless. A spokesperson for the CBP acknowledged Reuters’ request for comment Wednesday but did not provide an immediate response. The FCC did not immediately respond to a request for comment.

Sophgo was punished in the waning days of the Biden administration for allegedly serving as a middleman between high-end Taiwanese chipmaker TSMC and blacklisted Chinese telecom company Huawei, Reuters reported in October. (Editing by Leslie Adler)