Bitcoin mining operations across the United States are stalled as thousands of mining rigs sit locked in customs warehouses due to a blacklist targeting Bitman, a major Chinese supplier that makes 90% of all Bitcoin mining rigs.
The delays are hitting public mining companies, private companies, and independent operators, cutting profits and threatening mining efficiency. Bitmain’s shipments to the US have slowed to a crawl. The US Commerce Department blacklisted Bitmain’s AI affiliate, Xiamen Sophgo Technologies, in January, accusing it of advancing China’s domestic chip production goals.
Naturally, that triggered increased scrutiny from US Customs and Border Protection (CBP), which began holding shipments for weeks, demanding extra documentation, and imposing heavy fees on delayed hardware.
Customs crackdowns block shipments
The situation is hitting small and large mining firms alike. In Oklahoma, a 20-megawatt mining operation has 2,000 rigs sitting in limbo as customs officials slow-walk approvals. In New York, Bit Digital Inc. reported that 700 machines were delayed, though CEO Sam Tabar reportedly called the delay “minor” compared to their full operation.
Seattle-based Luxor Technology’s Chief Operating Officer, Ethan Vera, confirmed that customs is specifically targeting Bitmain shipments. “Shipments with Bitmain miner labels are among those being inspected,” he said. For mining companies waiting on new equipment, delays mean lost revenue, higher costs, and stalled expansion plans.
On top of that, customs inspections come with a price. CBP charges holding fees based on how long shipments remain in their custody. Some miners are being billed up to $500,000 in penalties, according to Vishnu Mackenchery, Director of Global Logistics at Compass Mining.
Meanwhile, Trump already imposed a 25% tax on imported Chinese mining rigs by classifying them as “data processing machines,” and on February 1, he added another 10% tariff on all Chinese imports, pushing costs even higher.
The total weight of imported Bitcoin mining rigs dropped by 65% in January, according to CBP data compiled by TheMinerMag.
Miners depend on cutting-edge rigs to stay competitive. The six most profitable mining machines as of August 2024 were all made by Bitmain. If new models become too expensive or impossible to import, US mining companies will be forced to use outdated machines, losing efficiency and rewards.
Mining revenue takes another hit
Transaction fees on the Bitcoin network have also collapsed. Miners now earn just 1.2% of their total revenue from fees, down from a peak of 75% last year, according to data from CryptoQuant. That’s a big problem.
Mining companies rely on transaction fees to offset the costs of new machines, electricity, and maintenance. With fees this low, any extra cost—like tariffs or delays—hits even harder.
For now, there’s no easy solution. Bitmain is trying to get around the problem by setting up production in other countries. In 2018, Bitmain just started manufacturing rigs in Indonesia, Malaysia, and Thailand to avoid the tax.
This time, Bitmain is taking it a step further. On December 9, the company announced it was launching a facility in the US., though did not share where the factory would be located or how soon it would start production. But in a statement posted on X, Bitmain said the new facility aimed to provide “faster response times and more efficient services to North American customers.”
In May 2024, the Biden administration ordered a Chinese Bitcoin miner, MineOne, to vacate a 12-acre site near Cheyenne, Wyoming. The Committee on Foreign Investment in the United States (CFIUS) claimed the company’s specialized mining equipment could be used for surveillance.
In October 2024, Taiwan Semiconductor Manufacturing Company (TSMC) stopped shipping chips to Bitmain’s AI affiliate after a Huawei processor was found using its technology. TSMC denied working with Bitmain, but the US Commerce Department clearly did not care.
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