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Chinese Bitcoin Mining Hardware Giants Establish U.S. Production to Circumvent Tariffs

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The world’s top three manufacturers of bitcoin mining machines — Bitmain, Canaan, and MicroBT — are setting up production bases in the United States as part of a strategic response to President Donald Trump’s tariff policies. These firms, all originally Chinese, dominate over 90% of the global market for mining rigs, specialized computers essential for bitcoin mining.

The move aims to avoid hefty U.S. tariffs imposed amid escalating trade tensions, while potentially easing geopolitical concerns related to China’s influence over critical tech infrastructure. Guang Yang, CTO of Conflux Network, highlighted that the trade war is triggering deep structural changes in bitcoin’s supply chain, pushing U.S. companies toward sourcing hardware from politically acceptable locations.

Bitmain, the largest by sales, began U.S. production in December 2023, shortly after Trump’s re-election. Canaan started trial U.S. production after Trump announced new tariffs on April 2, seeking to shield itself from duties. MicroBT is actively pursuing localization in the U.S. to reduce tariff impacts.

This sector, valued by analysts at around $12 billion by 2028, includes upstream mining rig production, energy-heavy bitcoin mining, IT infrastructure, and trading platforms. U.S. rival Auradine, backed by leading miner MARA Holdings, is lobbying to restrict Chinese equipment imports to boost competition in hardware.

Despite 30% of global bitcoin mining taking place in North America, more than 90% of mining hardware comes from China, creating an imbalance and raising security concerns. Auradine’s Sanjay Gupta warned of risks linked to “hundreds of thousands” of Chinese rigs connected to the U.S. grid. However, Canaan’s Leo Wang dismissed security threats from mining rigs, stating they are ineffective outside bitcoin mining, though he warned Chinese manufacturers could face collateral impacts from U.S. tech restrictions.

Bitmain’s AI arm, Sophgo, was recently blacklisted by the U.S. government over security concerns, illustrating rising scrutiny of Chinese tech firms.

Historically, China dominated bitcoin from hardware through mining and trading until 2021, when Beijing banned cryptocurrency activities citing financial risks. Miners and exchanges moved abroad, but Chinese manufacturers maintained dominance in hardware, leveraging their early lead in designing mining-specific chips.

Canaan has relocated its headquarters to Singapore and established a U.S. pilot production line, with the U.S. contributing 40% of its revenue last year. Wang emphasized the goal of reducing costs amid tariffs by exploring all alternatives.

The U.S. currently imposes a baseline 10% tariff on many imports and an additional 20% on Chinese goods, with potential further tariffs on Southeast Asian countries hosting Chinese assembly plants.

While Trump promotes crypto-friendly policies and has positioned himself as a “crypto president,” China’s dominance in bitcoin infrastructure remains a potential choke point. Legal expert John Deaton warned that China’s control could disrupt bitcoin network stability and impact U.S. users if exports are restricted.

Top U.S.-based miners, including MARA, Core Scientific, CleanSpark, and Riot Platforms, face risks from heavy reliance on Chinese hardware. Economist Ryan Yonk noted this dependence is “potentially problematic” despite Chinese rig makers’ efforts to establish a U.S. presence.

Kadan Stadlemann, CTO at Komodo, said U.S. miners will still buy rigs from China in the short term and face higher costs, but the tariff-driven shift aims to reshape the industry’s supply chain long term.

Fear Grips France’s Crypto Community After Wave of Violent Kidnappings

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France’s cryptocurrency sector is reeling from a spate of violent kidnappings targeting crypto executives and their families, prompting fear, anger, and urgent calls for action within the industry.

The kidnapping attempt this week of the daughter of Pierre Noizat, CEO of French crypto firm Paymium, in broad daylight on a Paris street, is the third high-profile incident in recent months. The disturbing video footage has sparked outrage and forced many executives to alter their routines, boost personal security, and consider leaving France altogether.

“Working in the ecosystem feels like having a target on your back,” said Alexandre Aimonino, 23, co-founder of a crypto compliance firm.

A String of High-Profile Attacks:

  • January: A Ledger co-founder and his wife were kidnapped. A ransom was paid in crypto, and later recovered by police.

  • May: The father of another crypto executive was kidnapped and physically mutilated. Seven people were arrested.

  • This week: Noizat’s daughter narrowly escaped abduction in what appeared to be a coordinated attack by a masked gang.

All victims have been rescued, but the escalating violence and brutality—including finger amputations—have deeply rattled the community.

Crypto’s Visibility Becomes a Liability:

Experts say a surge in crypto wealth, combined with a lack of traditional financial oversight, is attracting organized criminals:

  • High-profile executives often share wealth indicators online.

  • Crypto ransoms are perceived as easier to launder than cash.

“Crypto transactions are more likely to escape scrutiny than traditional banking systems,” said Michael Lyons, anti-money laundering lawyer at Clifford Chance.

Security Response and Regulatory Backlash:

  • Interior Minister Bruno Retailleau has promised stronger protection, including home security audits and priority access to police services.

  • Some leaders, like Ledger co-founder Eric Larchevêque, are pushing for legal reforms, including:

    • The right to bear arms

    • Greater protection for self-defence

Meanwhile, Paymium is advocating deregulation of crypto in response to EU’s “travel rule”, which mandates tracking of sender/receiver information for transfers. The firm argues it exposes executives to targeting.

Industry-Wide Fallout:

  • Demand for bodyguards and private security has surged, according to firms Wagram and ARECIA.

  • Crypto insurance providers in the UK, like Ben Davis, report that 100% of clients now ask about kidnapping protection, up from nearly zero two years ago.

“These attacks are becoming more gruesome, more brazen,” said Davis, himself a crypto investor who has upgraded his own security.

The crisis threatens to push innovators and startups out of France, undermining the country’s ambition to be a crypto and fintech leader in Europe. Without urgent and coordinated action, industry insiders warn that security fears could erode trust and drive the sector underground.

Coinbase Faces Up to $400M Loss from Cyberattack, SEC Scrutiny Adds Further Pressure

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Coinbase (COIN.O) warned it could incur a loss of $180 million to $400 million from a cyberattack that breached the account data of a “small subset” of customers, the company disclosed in a regulatory filing on Thursday. The breach comes at a critical time for the crypto exchange, just days before it is set to join the S&P 500 index.

Breach Details:

  • Coinbase received a ransom email on May 11 from a threat actor claiming to have internal documents and customer data.

  • While login credentials and passwords were not compromised, attackers obtained names, email addresses, and physical addresses.

  • Hackers tricked some users into sending funds, and Coinbase pledged to reimburse those affected.

  • The breach reportedly involved foreign contractors and support staff, several of whom have since been terminated.

Coinbase has refused a $20 million ransom demand and instead offered a $20 million reward for information on the attackers. The company said it’s cooperating with law enforcement and plans to open a new U.S.-based support hub to boost security.

SEC Investigation:

  • In a separate issue, the U.S. Securities and Exchange Commission (SEC) is investigating whether Coinbase misstated its user figures in past reports.

  • The SEC is specifically reviewing the company’s “verified user” metric, which Coinbase stopped reporting 2.5 years ago.

  • There is speculation that the probe could relate to know-your-customer (KYC) compliance, though Coinbase denies any such inquiry is ongoing.

“This is a hold-over investigation from the prior administration,” said Paul Grewal, Coinbase’s Chief Legal Officer.
“We strongly believe this investigation should not continue.”

The SEC declined to comment on the status of the probe.

Market Impact and Industry Implications:

  • Coinbase shares fell 6.5% following news of the breach and investigation.

  • The incident casts a shadow over its upcoming inclusion in the S&P 500, which had been seen as a milestone for mainstream crypto legitimacy.

  • The breach also adds to industry-wide concerns, following the $1.5 billion Bybit hack in February, part of an estimated $2.2 billion in stolen crypto assets in 2024, according to Chainalysis.

“The cyberattack may push the industry to adopt stricter employee vetting and introduce reputational risks,” said Bo Pei, analyst at U.S. Tiger Securities.

Coinbase is now also facing a lawsuit in New York alleging it failed to secure personal data of millions of users.

As the crypto industry matures, the growing scale of attacks and regulatory scrutiny continue to challenge the sector’s trust, security, and investor confidence.