Key Insights:
- Certain cryptocurrency mining firms reportedly undervalue their ASIC shipments to evade customs duties in the U.S.
- U.S. Customs and Border Protection (CBP) has intensified scrutiny on mining shipments recently.
- New tariffs imposed by the Trump administration could raise costs for imports from Southeast Asia.
Some sectors within the bitcoin (BTC) mining industry are known for routinely reporting lower values for shipments on record with U.S. Customs and Border Protection (CBP) in an effort to minimize customs duties.
As the Trump administration raises tariffs on various imports globally, this practice of underreporting is gaining significance. Jill Ford, founder of BitFord Digital, noted that, “[Industry members] usually have ways around [tariffs] by declaring lower value on packages. That’s risky, and I’m not suggesting it, but that is truly what they’re doing to bring them in.”
The bitcoin mining business has expanded in the U.S. significantly since China’s ban in 2021, pushing many miners to states like Texas. However, the market for application-specific integrated circuits (ASICs), valued around $30 billion, is primarily controlled by Chinese manufacturers like Bitmain and MicroBT.
BitFord, acting as a mediator in this supply chain, procures ASICs and also offers secondary market options. However, the recent trade policies threaten higher tariffs from Southeast Asian countries such as Malaysia, Thailand, and Indonesia. In April, a temporary moratorium on some tariffs was announced, yet uncertainty looms for many miners.
Ford remarked, “Before, a mining rig that was maybe worth $3,000, we would declare that it was worth $300. It would just pass on through. Now it’s like they’re looking it up on the internet to see what the value really is.”
The enforcement of customs regulations seems to vary across states, with different levels of scrutiny encountered by miners based on location. Ford elucidated that smaller shipments often succeed without issues, whereas bulk imports attract closer inspection.
As the enforcement evolves, Ford expressed a debate among U.S.-based operations about the incorrect valuation practices historically fostered by suppliers. She emphasized the importance of correctly declaring shipment values to evade legal repercussions.
Following her past legal troubles related to a COVID loan, Ford launched BitFord, which has become successful in the market since its inception.
Legal Implications
All products entering the U.S. are assigned value by an importer of record, whether that be a supplier, a broker, or the ultimate customer. As CBP has increased its scrutiny, the potential for fines or back duties due to misrepresentation of shipment values looms larger than before. The financier cautioned that penalties could amount to three times the damages incurred for civil infractions, while criminal penalties, though rare, are possible as well.
This tightening of regulations is prompting ergonomic reconsideration among miners regarding their import strategies and, with notable tariffs expected, a shift in operational focus may follow.
