President Biden issued an order requiring a Chinese-owned crypto mining company to vacate and sell certain real property and remove equipment from land in close proximity to Warren Air Force Base (AFB) in Cheyenne, Wyoming.

In June 2022, the crypto mining company acquired 12.06 acres within 1 mile of the Warren AFB, a strategic missile base and home to Minuteman III intercontinental ballistic missile.  The parties to the transaction did not voluntarily notify CFIUS at the time of the transaction, and no filing was required.  Instead, approximately two years after the sale closed, a tip from the public led CFIUS to review the real estate transaction under its authority to review certain, so-called non-notified transactions. 

CFIUS identified national security risks relating to the proximity of the real property to Warren AFB and the presence of specialized equipment used to conduct cryptocurrency mining operations, some of which is foreign-sourced and potentially capable of facilitating surveillance and espionage activities. CFIUS determined mitigation measures would not be effective to address these national security risks and referred the transaction to the President.

President Biden ordered the crypto mining company to (1) sell or transfer the property within 120 calendar days; and (2) remove all equipment and improvements within 90 calendar days. The crypto mining company and its affiliates are immediately barred from any physical or logical access to the real estate, equipment, or improvements until divestment and removal are complete to CFIUS’s satisfaction. Additionally, they are required to cooperate fully, provide regular updates, and allow CFIUS access and inspection on reasonable notice to all premises and facilities in the United States for purposes of verifying and enforcing compliance. 

President Biden’s order is the first Presidential prohibition based on CFIUS’s real estate jurisdiction and the eighth Presidential prohibition in CFIUS’s approximately 48 years. This development highlights the need for foreign investors to evaluate their real property holdings and investments in the United States, particularly, but not limited to, those investors who are ultimately owned or controlled by Chinese nationals.  This development also demonstrates how CFIUS’s roll-out of tip reporting hotlines and other measures to review non-notified transactions continue to have an impact on existing investments in the United States.