May 16, 2025

Eliminating Hidden Threats: Chinese Encryption Chip Risk – Why Federal IT Must Ditch Some USB Devices

In the world of federal data security, what you don’t know about your hardware could hurt you—and your agency. Portable USB devices remain essential for mission-critical operations, from secure data transfers in air-gapped environments to emergency response deployments. But here’s a silent, systemic risk most teams overlook:

Many encrypted USB drives used in government today contain Chinese-made encryption chips.

That’s not just a procurement detail—Chinese encryption chip risk is a cybersecurity red flag.

The Hidden Vulnerability in Your Supply Chain

While these devices may advertise “military-grade encryption,” what’s embedded inside matters most. Under China’s National Intelligence Law, any company—particularly those that manufacture encryption hardware—is compelled to insert surveillance backdoors or share cryptographic keys with Chinese authorities.

This means even a seemingly secure USB drive can pose a foreign surveillance and supply chain threat, especially in federal environments handling classified or sensitive information.

TAA Compliance Isn’t EnoughAnd That’s the Problem

Most federal IT leaders know they’re required to purchase TAA-compliant hardware, meaning devices must be manufactured or substantially transformed in designated, trusted countries. On the surface, this seems like a solid safeguard against foreign-sourced threats.

But here’s the issue:

TAA compliance does not guarantee that every component inside a device—especially the encryption chip—is from a trusted source.

In many cases, devices assembled in TAA-approved countries still contain Chinese-made encryption chips, which slip through the cracks because the device as a whole meets the TAA’s definition of compliance. This creates a dangerous loophole—one that adversaries are all too ready to exploit.

Federal agencies often spend more for a “secure, compliant” USB drive. But if that device’s encryption chip comes from China, the investment may be misguided—and the chinese encryption chip risk, invisible.

The DataLocker Difference

DataLocker’s Sentry 5, K350, and DL4 FE encrypted USB drives are built specifically for secure government use. Every component is:

  • Manufactured with non-Chinese encryption chips
  • Fully TAA compliant, from firmware to final assembly
  • FIPS 140-2/3 certified, meeting the highest federal data protection standards

These devices support multi-factor authentication (MFA) through YubiKey and CAC/PIV smartcards, with biometric login options for convenience and speed—eliminating the friction of password-only access.

Complete Oversight with SafeConsole

Paired with SafeConsole, DataLocker devices can be remotely managed and monitored across departments, offering:

  • Centralized audit logging
  • Role-based access control
  • Remote lock, wipe, and self-destruct
  • Remote password reset 
  • Geofencing and time-based use policies

This not only strengthens data governance but also significantly reduces the risk of data loss or device misuse.

Secure From the Inside Out

If you’re trusting USB devices in high-security environments, you can’t afford to trust what you can’t see. Encryption means nothing if the chip itself is compromised.

DataLocker provides peace of mind with trusted hardware, full auditability, and centralized control—making it the clear choice for federal agencies ready to eliminate hidden threats and meet evolving security mandates.

Eliminate Chinese encryption chip risk with DataLocker.