Can New York Be America’s Crypto Capital With Crypto Mining Moratorium?

On April 27, foreign media reported that lawmakers in the New York Assembly voted to pass a bill that would block the expansion of certain carbon-based crypto mining operations.

The bill passed with 95 votes in favor and 52 against. It targets a two-year moratorium, in particular preventing the issuance of new licenses for carbon-fueled proof-of-work mining operations that use off-balance sheet energy. Additionally, established sites planning to increase energy consumption will not be able to obtain license renewals.

The bill’s lead sponsor, Democratic Assemblyman Anna Kellers, said the goal is to ensure New York State meets the measures established by the New York Climate Leadership and Community Protection Act (CLCPA) passed in 2019, which requires that by 2050 New York reduced greenhouse gas emissions by 85 percent and cut net emissions to zero. The Congress is the lower house of the New York State Legislature.

The bill also requires the Department of Environmental Protection (DEC) to implement an overall environmental impact statement for all crypto mining operations in the state. The study will be completed within a year, giving lawmakers time to act on the findings before the ban expires.

For months, lawmakers have been pushing to temporarily halt the growth of crypto mining in the state before a comprehensive study can be conducted. An earlier version of the bill, which called for a three-year moratorium on mining at wider mining facilities, was voted down at the General Assembly last June.

Members of Congress debated the bill for more than two hours on Tuesday. To dispel the idea that the moratorium will ban crypto mining across the board, Kellers, the bill’s lead sponsor, has repeatedly emphasized that the ban will only apply to a select few fossil fuel power plants. Kellers noted that the bill is not retroactive in nature. (…) It’s only for power plants, we have about 30 in the upstate and about 19 in the southern state.

Republican Congressman Robert Smullen called the bill “anti-tech” legislation “disguised as environmental law.” The legislation would send the wrong signal to New York’s financial services sector and could lead miners to simply move to other states and work with them. We are entering a more cashless economy. I think we should welcome these industries and find other ways to reduce emissions.

Kellers insisted that the bill would not hinder New York’s ability to become a cryptocurrency leader in other aspects of the industry, such as buying, trading and selling digital assets.

After China banned crypto mining last year, U.S. hashing power has grown exponentially, with several miners repurposing previously closed power plants.

Greenidge Generation, a miner with a 107-megawatt power plant in the region, is awaiting approval of its application to renew its mining license. Last month, New York’s Department of Environmental Protection (DEC) delayed a final decision until June while it reviewed the company’s proposed mitigations and nearly 4,000 public comments.

Republican Congressman Philip Palmesano said the Greenwich factory had contributed positively to tax revenue and job creation. Kellers claims the agritourism sector in the Finger Lakes region, which employs 60,000 people in the area, has reported negative impacts from the Greenwich plant in terms of sound, air and water pollution.

It is reported that the bill was first introduced in May last year and needs to be passed in the parliament and the Senate. The bill is still under consideration by a New York State Senate committee.

New York City’s crypto-friendly Mayor Eric Adams previously voiced his opposition to cryptocurrency mining during a local government budget hearing with elected officials in Albany. Adams said, I support cryptocurrency, not cryptocurrency mining.

New York State Assemblyman Anna Kellers praised Adams for distinguishing between cryptocurrencies and cryptocurrency mining. She added that New York City could become the crypto capital of the United States without supporting environmentally damaging crypto mining.

Last year, New York attracted a whopping $6.5 billion in investment, or 46 percent of the funding for blockchain or cryptocurrency-focused companies, according to data provider CB Insights. NYDIG (New York Digital Investment Group LLC) and Celsius Network LLC led the way with $1 billion and $750 million, respectively. And Silicon Valley, the tech hub known for its huge venture capital spending, ranks second in the nation with $3.9 billion in crypto company funding. 

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