On May 13, 2024, President Biden issued an order (the “Order”) requiring MineOne Partners Limited, a company majority owned by Chinese nationals, and certain affiliates (together, “MineOne”) to divest previously acquired real estate (the “Real Estate”) in Wyoming located near Francis E. Warren Air Force Base (“Warren AFB”). The Order gives MineOne 120 days to divest the Real Estate and includes strict monitoring measures to allow the U.S. government to supervise the sale of the Real Estate to an approved buyer.
MineOne acquired the Real Estate in June 2022 and then made improvements to use the Real Estate for cryptocurrency mining operations. MineOne did not notify or receive approval from the Committee on Foreign Investment in the United States (“CFIUS”) prior to acquiring the Real Estate. CFIUS subsequently reviewed the transaction after receiving a public tip.
In connection with its review, CFIUS identified national security risks arising from MineOne’s ownership of the Real Estate due to its proximity to Warren AFB, a strategic missile base and home to U.S. Minuteman III intercontinental ballistic missiles, as well as related risk associated with MineOne operating specialized cryptocurrency mining equipment on the Real Estate, some of which was foreign-sourced and, according to CFIUS, had the potential to facilitate espionage activities.
Pursuant to the Order, MineOne must cease operations immediately, remove all equipment and improvements within 90 days of the Order, and divest its interests in the Real Estate within 120 days of the Order. Further, MineOne must seek approval from CFIUS for the intended buyer of the Real Estate, certify on a weekly basis compliance with the terms of the Order, and allow CFIUS access to the Real Estate to verify and enforce compliance with the Order.
The Order is the first time President Biden has prohibited a transaction under CFIUS authorities (and only the eighth time in the history of CFIUS that such an order has been issued by the President). The Order also is the first time a President has prohibited a transaction under the expanded real estate authorities granted to CFIUS by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). In particular, under FIRRMA and its implementing regulations, CFIUS has authority to review the acquisition of certain property rights in real estate located within specified ranges of airports, maritime ports, and military installations listed in the CFIUS regulations.