Congressman calls for ‘national security’ probe of Bitmain, Cango

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Block reward miners continue to struggle due to rising network difficulty, a lack of transaction fees, and the world’s biggest ASIC manufacturer’s supply surplus.

• BTC difficulty at all-time high, network activity near all-time low
• Bitmain legal drama shines light on U.S. operations
• Congressman seeks federal probe of Bitmain, Cango
• Cango, IREN post very different results
• August production numbers

The BTC network’s difficulty rate has hit another all-time high, with the latest two-week adjustment pushing the rate up nearly 5% to over 136 trillion hashes necessary to mine a single new block. The increase came as network hashrate also hit new highs, even as the BTC token’s fiat value retreated from its mid-August record high of $124,128.

While a high hashrate is good for network security, it’s bad for mining economics. Investment bankers Jefferies (NASDAQ: JEF) estimated that BTC miners’ profitability fell as much as 5% from July to August. Data from the U.S. Bureau of Labor Statistics shows electricity costs—mining’s single largest line item—rose 6.2% year-on-year in August, more than twice the inflation rate.

Also challenging mining economics is the ongoing dearth of transactions on the network and the corresponding paucity of transaction fee revenue. The Messari analyst known as AJC recently tweeted that BTC “is a ghost town.” (Emphasis in the original.) Network activity “has fallen off a cliff,” with total daily fee revenue “averaging under $500K,” begging the question: “When do miners start getting concerned?”

Yesterday, most likely. BTC’s primary use case has rapidly downshifted from the ‘peer-to-peer electronic currency’ described in the Bitcoin white paper to serving as passive bait for investors in so-called ‘treasury’ companies. Still more BTC is gathering dust as the backing for the growing number of BTC spot-based exchange-traded funds (ETFs).

This so-called ‘paper Bitcoin’ movement has contributed to nearly 5% (over 1 million tokens) of all the BTC that will ever exist currently being held in treasury firms for the sole purpose of boosting these firms’ share prices. And they keep coming, the latest being Vivek Ramaswamy’s new Strive firm, which aims to raise $1.5 billion to buy/mothball BTC.

Three of the top-10 treasury firms are miners, led by MARA Holdings (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), and CleanSpark (NASDAQ: CLSK), with two others in the top-20. BTC inflows to mining-linked wallets have risen for three weeks running, at levels not seen since October 2023. But are they HODL’ing out of confidence that prices will rise, or because they don’t want to sell at a loss?

Bitmain’s US mining operations coming to light

The dominant manufacturer of ASIC mining rigs is Beijing-headquartered Bitmain, which has reportedly reacted to slowing rig sales to U.S. miners by deploying excess inventory to hosted mining operations. These operations are said to target new clients rather than established miners, and many of these new clients are based outside the United States.

But not all of them. Bitmain attorneys are shedding some light on its U.S.-hosted mining operations after recently suing a former U.S. client, ORB Energy Co. ORB filed for Chapter 11 protection on August 5 after Bitmain terminated their contract the previous month. The bankruptcy is being handled by the U.S. Bankruptcy Court for the Southern District of Texas.

Bitmain is trying to reclaim the ~2,700 Antminer rigs housed at Orb’s Van Vleck, Texas, facility. Bitmain argues that the rigs, worth over $5.5 million, were never owned by ORB, merely leased under a ‘hosting sale agreement’ and thus shouldn’t be part of ORB’s bankruptcy estate. Bitmain says its ORB contract explicitly states that the ownership of the rigs “remains absolutely with Bitmain.”

Bitmain said it terminated its hosting agreement with ORB after the latter ignored multiple breach of contract notices. Bitmain alleges that ORB personnel blocked Bitmain staff from accessing the Van Vleck facility and refused to install monitoring software, but that’s just the start.

Bitmain further accused ORB CEO Jamieson Zaniewski of improperly redirecting BTC tokens generated by ORB’s mining operations to his own digital wallets. Bitmain alleges that the illegal diversion began last December and that Zaniewski sold “thousands” of tokens that rightfully belonged to Bitmain in the months preceding the bankruptcy filing.

That’s far from the only case in which Bitmain squabbles with U.S. hosting clients. Earlier this month, a company called Old Const accused Bitmain of improperly terminating their November 2024 agreement for Old Const to host over 7,000 ASIC rigs at a site in Texas.

Another suit launched this month is that of Iowa-based Energy Conversion Group, which is suing Bitmain for allegedly misrepresenting the quality of some 5,000 refurbished miners the company purchased from Bitmain for nearly $5 million.

Last month, Bitmain won a $4.5 million arbitration ruling against MakerStar Capital for the latter’s 2024 sale of a Mississippi facility to CleanSpark three months into a two-year deal with Bitmain.

In July 2024, Bitmain sued JWKJ Technologies, claiming redirection of hash power to JWKJ’s own mining pools, failing to maintain the stipulated 95% uptime of Bitmain’s rigs, and unlawfully detaining $15 million worth of Bitmain ASICs at JWKJ’s Missouri facility.

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Congressman seeks Bitmain, Cango probe

Bitmain recently began establishing manufacturing operations within the U.S., a step intended to minimize the impact of President Trump’s steep tariffs on Chinese imports. Trump has also stated a goal of making the U.S. the ‘mining capital of the world’ and having the majority of newly mined BTC produced by U.S.-based operators.

Which brings us to a letter sent earlier this month to Treasury Secretary Scott Bessent by Rep. Zachary Nunn (R-IA), who raised “potential national security considerations surrounding a contemplated foreign investment or acquisition of a U.S. business that may fall under CFIUS [Committee on Foreign Investment in the United States] jurisdiction.”

Nunn referred to the “expansion of digital asset mining operations in the U.S.” by companies like Bitmain and Shanghai-based Cango (NYSE: CANG). The latter firm only commenced mining operations last November, but is already among the top-five in terms of hashrate.

Cango got its original supply of ASICs from Bitmain, and speculation has mounted that the pair is more than just supplier/customer. Nunn wants Bessent to review “reports on Bitmain’s potential acquisition of Cango through Class B shares and affiliated entities.”

But Nunn also expressed concern over reports that Bitmain is “exploring direct ownership of U.S. power generation assets, which could raise long-term strategic considerations.” As America seeks to take the lead in emerging tech like mining and AI data centers, “it is essential to remain proactive and vigilant about potential strategic dependencies.”

A Bitmain spokesperson told Bloomberg that rumors of the company acquiring Cango “are simply not correct.” The company also denied that it’s exploring direct ownership of U.S. power generators and said the idea that its ASICs could control U.S. infrastructure “frankly makes no sense.”

It’s unclear if/how Bessent responded to Nunn’s letter. Besides the alleged national security implications, other, perhaps even more sensitive factors are at play. Like how the Trump-linked mining outfit American Bitcoin Corp (NASDAQ: ABTC) recently purchased $314 million worth of ASICs from Bitmain. Tread carefully, Zach.

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Cango, IREN results

Cango explained the red ink as “mainly attributable to the one-off loss on discontinued operations and the non-cash impairment loss from mining equipment contracted last November.” Cango CEO Paul Yu focused instead on the company’s mining capacity, breaking the 50 EH/s mark by the quarter’s end and the acquisition in August of a 50 MW facility in the state of Georgia.

Adding weight to claims of a Cango-Bitmain link, Yu hailed Cango’s “asset-light strategy, which enables us to acquire plug-and-play mining rigs with minimal upfront capital, allowing us to scale more quickly and cost-effectively.”

A far different result was found in the fiscal FY25 results from IREN (NASDAQ: IREN), which reported net income of $176.9 million in the three months ending June 30. That figure was goosed by $147.7 million in unrealized gains on financial instruments, but operating income was nonetheless a healthy $20.6 million.

For its fiscal year, IREN reported net income of $86.9 million, a significant turnaround from its nearly $29 million loss in FY24. The past year saw IREN’s mining revenue rise 163% to $484.6 million, while AI Cloud Services revenue more than quintupled to $16.4 million.

IREN co-founder/co-CEO Daniel Roberts called FY25 “a breakout year financially and operationally.” He could have added ‘personally’ as well, as he and his co-founder/co-CEO brother William each sold 1 million IREN shares on September 11 as they hit a new record high of over $33.

The joke’s on them, as the shares closed Monday up another 9.4% to $37.14. For the year-to-date, IREN shares are up over 278%. Since the brothers still own nearly 14 million shares apiece, don’t cry too hard at their misfortune.

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August tale of the tape

IREN dethroned perennial mining champ MARA in July, but MARA reclaimed its throne in August in decisive fashion, leaving a proper dogfight for second place. As always, these August 2025 production reports are listed below in descending order of magnitude.

• MARA produced 705 BTC in August, only two better than July’s tally, but that was enough to claw back to the top of this mountain. MARA’s energized hashrate nudged up 0.5 points month-on-month to 59.4 EH/s. MARA used BTC’s late-August price decline to add more tokens to its treasury, which topped 52,477 by month’s end.
• IREN produced 668 BTC in August, down from 728 in July, as its average operating hashrate dipped 1.5 points to 44 EH/s. August’s AI Cloud revenue was largely unchanged at $2.4 million, but IREN is preparing to take delivery of another 9,000 NVIDIA Blackwell GPUs “over the coming months,” and the company’s Prince George, British Columbia facility is bracing for their arrival.
• Hot on IREN’s heels was Cango, which produced 663.7 BTC in August, up from July’s 650.5, as average operating hashrate grew by nearly three points to 43.7 EH/s. Cango’s treasury topped the 5,000 mark last month and currently stands at 5,418.
• And hot on Cango’s heels was CleanSpark, which mined 657 BTC in August, down from July’s 671, with an average operating hashrate of 43.3 EH/s. CleanSpark sold 533.5 BTC for $60.7 million in August, leaving its treasury at 12,827 tokens by month’s end.
• Riot Platforms mined 477 BTC in August, seven more than July’s total, as operating hashrate rose 1.2 points to 31.4 EH/s. August’s BTC production marks a new company high for that month and a 48% rise from August 2024. Riot’s ‘power credits’ revenue—paid by struggling utilities so Riot won’t further task their grid—totaled $16.1 million in August, up $4.2 million from July. Riot sold 450 BTC last month, leaving it with 19,309 at month’s end.
• BitFuFu (NASDAQ: FUFU) generated 408 BTC in August, down from 467 in July. Self-mined BTC fell from 83 to 55, while its cloud-mining customers produced 353, down from 384. The declines came as hashrate fell three points to 35.6 EH/s. BitFuFu’s BTC treasury rose by 115 tokens to 1,899 by month’s end.
• Bitdeer (NASDAQ: BTDR) produced 375 BTC in August, one-third better than July’s total, as hashrate rose 7.8 points to 44.2 EH/s. Bitdeer’s self-owned mining rigs increased by 16,000 to 143,000, while its hosted total remained at 86,000. Bitdeer’s treasury increased by 267 tokens since July, bringing its total to 1,934.
• Hive Digital (TSXV: HIVE) mined 247 BTC in August, up from July’s 203, as average hashrate increased 3.5 points to 16.3 EH/s (and has since increased to 18 EH/s). Hive is looking to boost its daily BTC production from its current eight tokens to ~12, assuming it reaches its target of 25 EH/s by Thanksgiving (November 27).
• Cipher Mining (NASDAQ: CIFR) brought in 241 BTC in August, up from 214 in July, as the month-end operating hashrate rose 2.2 points to 23 EH/s. Cipher sold 42 BTC last month, while its treasury rose to 1,414 tokens.
• Finally, Canaan Inc. (NASDAQ: CAN) produced 98 BTC in August, nine more than in July, as its month-end operating hashrate reversed its recent decline by rising 2.4 points to 8.6 EH/s. The company expects to push this rate past 10 EH/s as rigs already delivered to its facilities come online. Canaan’s treasury stood at 1,547 BTC at month’s end.

Not included in the above stats is ABTC, as neither it nor its mining partner, Hut 8 (NASDAQ: HUT), appears all that eager to release any hard performance numbers (before or after ABTC’s dramatic listing on the Nasdaq on September 3).

However, speaking at last month’s BTC Asia 2025 conference, ABTC’s chief strategy officer Eric Trump claimed ABTC was “one of the biggest Bitcoin mining companies on earth. We mine about 3% of the world’s Bitcoin every single day.” With ABTC’s hashrate expanding to 24 EH/s as of September 4, hopefully, the company will start putting some meat on these data bones before too long.

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