Federal Judge Halts Arkansas from Shutting Down Chinese-American-Owned Crypto Mining Operation

A federal judge in Little Rock, Arkansas, has temporarily blocked state officials from enforcing laws that would shut down a cryptocurrency mining operation owned by a naturalized U.S. citizen of Chinese descent. The ruling, issued on November 25 by Chief U.S. District Judge Kristine Baker, comes amid a legal dispute over two controversial state laws aimed at curbing the influence of foreign entities—particularly those with ties to China—on local businesses and property.

The Laws at the Center of the Dispute

At the heart of the case are two Arkansas laws—Act 636 of 2023 and Act 174 of 2024—designed to limit Chinese ownership of property and business operations in the state. Act 636 prohibits individuals or companies with links to the Chinese government from owning property in Arkansas, while Act 174 goes further, barring foreign entities from owning digital asset mining operations within the state.

The state claims that Jones Eagle, a cryptocurrency mining firm, is owned by Qimin “Jimmy” Chen, a Chinese national, and has moved to shut down the operation under these laws. However, Chen is a naturalized U.S. citizen, and his legal team argues that the state’s actions are discriminatory and unconstitutional.

Chen, who lives in New York, filed a lawsuit against the state, arguing that the attempt to shut down his mining operation constitutes illegal discrimination based on his national origin. According to court documents, Chen owns a majority stake in Jones Eagle through Eagle Asset Holding. In response, he requested a Temporary Restraining Order (TRO) to prevent state officials from taking action against the business while the legal challenge is underway.

The judge’s ruling grants the TRO for 14 days, temporarily halting the state from enforcing the shutdown. A court hearing will be held after that period to determine whether to extend the order or issue a preliminary injunction that would prohibit any further action by Arkansas authorities. Chen’s attorney, Alex Jones, expressed confidence that the legal team will successfully argue that the state’s laws are unconstitutional and overreach into the rights of U.S. citizens.

State’s Argument: A Crackdown on Foreign Influence

The state’s actions come as part of a broader crackdown on Chinese influence in U.S. business operations. Arkansas Attorney General Tim Griffin has publicly stated that his office has been investigating crypto mining operations, including the one owned by Chen, to ensure compliance with state regulations. According to Griffin, some mining operations have not cooperated fully with the investigation.

“I have been investigating a number of crypto mining operations and simply seeking the facts, but not all of the entities have cooperated fully,” Griffin said in a statement. However, Chen’s legal team contends that his company is fully compliant with state laws and has attempted to engage with the authorities on multiple occasions, only to be met with resistance.

This legal battle is part of a larger national debate about the role of foreign ownership in the rapidly growing cryptocurrency mining sector. In recent years, China has been a major player in global crypto mining, but as the U.S. has sought to regulate and control the industry more strictly, concerns over national security and foreign influence have led to increased scrutiny of foreign-owned operations.

While the controversy surrounding Jones Eagle and Chen’s legal challenge focuses specifically on the intersection of state laws, cryptocurrency, and national origin, it reflects broader concerns about how U.S. states and the federal government will regulate the industry moving forward. The outcome of this case could have significant implications for both cryptocurrency miners and the regulatory landscape at large.

The Road Ahead: A Courtroom Showdown

Chen and his legal team are now preparing for a courtroom showdown in which they will argue that the state’s laws are unconstitutional and represent overreach by the Arkansas legislature. The TRO granted by the judge ensures that no immediate action will be taken against the mining operation, providing some breathing room for the company to mount its defense.

“We will fully present our case as to why these laws are unconstitutional and reflect legislative overreach,” said Alex Jones, Chen’s attorney. The case has the potential to set a significant legal precedent for cryptocurrency mining operations owned by foreign nationals, as well as the broader regulatory environment for digital asset businesses in the U.S.

The legal battle over the closure of Jones Eagle’s cryptocurrency mining operation highlights the ongoing tension between state-level regulation, national security concerns, and the rights of business owners in the fast-evolving cryptocurrency industry. As the court prepares to hear arguments on the constitutionality of the laws at issue, all eyes will be on this case as a potential turning point in the regulatory landscape for crypto businesses in the U.S.