A Chinese National is Secretly Operating a Crypto Mine in Texas

Since China barred all activities in association with cryptocurrencies in 2021, countries like the United States have started to become a breeding ground for crypto mining. A recent case reported by American daily newspaper The New York Times tells the story of a university student who was operating a cryptocurrency mine in Texas secretly.

Not Just Chinese Investors, There’s More

A 23-year-old New York University student Jerry Yu owns a $8 Million condominium and a Bitcoin (BTC) mine worth $6 Million. Interestingly, he acquired it by paying in cryptocurrencies which are hard to track by authorities. It allows Chinese investors to avoid the US banking system according to The New York Times. Transactions happening in the traditional system require a bank to maintain records and report suspicious activities to the US Treasury.

Things went sideways for Jerry Yu’s crypto mining company, BitRush, operating in Channing, a town in Texas, when contractors complained about inadequate payment for their work in the mine. The crypto mine is designed to hold 6,000 machines to mine Bitcoin, the biggest crypto asset in the market currently trading at $42,400.

One of the lawsuits involving Jerry Yu Texas-based Crypton Mining Solutions alleges that investors in his mine “are not only Chinese citizens, but citizens in highly political and influential business positions.” However, there’s no convincing evidence to solidify this allegation. Investors in his business used Tether, a stablecoin, via a crypto exchange to conceal the source of funds.

A more typical scenario in several US counties argues that crypto mines are not providing any economic benefits, however, BitRush’s arrival provided some jobs to the residents of this town with a population of 281. Brent Loudder, a judge and husband of the county’s deputy sheriff, said that contractors stopped working as a part of a protest for their payments.

The documents seen by The Times reveal more details associated with the acquisition of the Texas site. As crypto transactions are difficult to track, it is unclear who would make the payment. All that is specified in the case was a wallet registered in a crypto firm FalconX that “had no visibility into the origin of the funds” according to deputy general counsel of FalconX, Purvi Maniar.

Using stablecoins like Tether for payments has become widespread in the Bitcoin mining industry according to The Times. Crypto miners in states including Arkansas and Wyoming have used them given that it can help in avoiding sales and capital gains taxes. However, Tether is working closely with the authorities to enhance transparency in transactions.

Jerry Parks, founder of Outlaw Mining, seller of the Texas site, told The New York Times that “Jerry is a college student in the U.S.A. with a very wealthy family from what I was told.” He added, “I don’t know of any of his investors or relation to foreign entities.”

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.