Albany, NY — In some states across the country, call on crypto mining companies to open stores, create jobs, and offer tax incentives in hopes of expanding their foothold in the tech industry. It is said that.
In New York, lawmakers are moving in a different direction. During the decline of the 2022 session, the legislature unexpectedly passed a bill last week banning new cryptocurrency mining permits for two years, especially in the burning of fossil fuels. A plant reused by some companies to power energy-intensive activities.
Breakthrough legislation that makes New York the first state to enact such a moratorium could affect regulations at other states or federal levels.
The passage of the bill marks a significant defeat for the fast-growing, well-funded industry by leftists, climate activists, and even the grassroots coalition of winemakers who argued that future cryptocurrencies will cost the environment. It was mining.
“Other blue states may introduce such a law based on the efforts of the Environmental Lobby,” said Jon Olsen, New York’s chief representative of the Blockchain Association, an industry group that opposes the Moratorium. Said. “That is certainly a concern.”
However, it is not clear whether Governor Kathy Hokul will sign the bill. And the crypto industry is expected to reject the bill and invest heavily in efforts to persuade her to influence other industry-friendly regulations in Albany.
Hochul’s campaign has already received $ 40,000 from Ashton Soniat, CEO of Coinmint, a cryptocurrency miner on the premises of a former aluminum plant in Massena, NY, a small town northeast of Niagara Falls. increase.
Antonio Delgado, Deputy Governor of Mr. Hokul, who faces two major challengers this month, has received a much larger political gift. Backed by the founder of FTX, a major cryptocurrency exchange, Super PAC has spent about $ 1 million on digital advertising in the past few weeks to support his campaign, according to state filings.
Michael Levine, a spokesman for Super PAC, said he is dedicated to helping candidates who believe they will help fight a pandemic. However, the five state-wide ads also highlight Delgado’s efforts on climate change, infrastructure, abortion and schools.
According to state records, the company also pays consulting firm Hinman Straub $ 12,000 a month to reach out to the state government on cryptocurrency regulations. FTX founder Sam Bankman-Fried said in a statement that the company Apply for a trust charter He has been operating in New York and has been engaged in discussions with regulatory agencies about its application.
The governor, a moderate Democrat facing the primary on June 28, was uncommitted about whether she would sign the bill, environmental activist priorities, and the party’s left. Hochul probably doesn’t have to make a decision until December 31st.
At a press conference in Manhattan on Tuesday, Mr. Hokur said, “We will consider all bills very closely.” “There’s a lot to do in the next six months.”
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Hochul previously described the moratorium as “open-minded,” but he also keeps in mind that many mining businesses do not enact laws that could impede job creation in the northern communities in which they are based. I did.
Bitcoin mining is an integral verification process for the Bitcoin economy. Powerful computers connect to the Bitcoin network, perform complex mathematical tasks, validate transactions, and infer hundreds of billions of numbers per second. As a reward for this service, Digital Miners will receive new Bitcoins and provide financial incentives to keep their computers running.
As the value of cryptocurrencies has increased, Bitcoin mining has become a major industry. There are hundreds of millions of dollars worth of publicly traded cryptocurrency mining companies like Riot Blockchain and Marathon Digital Holdings. Estimates vary, but according to Democrat Anna Keres, who sponsored the bill in the House of Representatives, there are 19 mining operations in New York that are fully operational or could be operational by the end of the year.
The Democratic-controlled state legislature’s move aims to target crypto mining companies that are trying to reuse some of New York’s oldest and dirtiest fossil fuel power plants when they are decommissioned. It is said that.
Over the next two years, the bill will put a moratorium on a new project to generate electricity “behind the meter” for cryptocurrency mining using fossil fuel power plants, requiring the state to investigate the impact of the industry. To do.
“Delayed signing of the bill puts us at serious risk of buying many old, inefficient, retired power plants and returning them to an integrated cryptocurrency mining business for private gain. “Mr. Keres said.
The proposed ban has elicited fierce opposition from domestic cryptocurrency industry groups concerned that the moratorium could signal similar regulations across the country, and it unfairly unfairly immature industries. Some lawmakers said they had targeted.
The industry is warmly welcomed in other states, and some opponents of the ban argue that those interested in the mining industry in New York may simply move.Last year, Kentucky A pair of bills to create tax incentives For cryptocurrency mining companies.legislation suggestion In January, Illinois planned to amend state legislation to extend incentives to mining companies with stores there. And both Texas and Georgia are friendly to the industry.
“It’s a shame that Congress voted to impose a moratorium on Bitcoin miners in New York,” Perriand Boring, chairman of the Digital Commerce Chamber of Commerce, an industry advocate, said in a statement. “This is a significant setback for the state and will weigh on our future as a leader in technology and global financial services.”
The bill passed Congress in April, but after enthusiastic lobbying and late-night discussions early Friday morning, the Senate unexpectedly revived and was passed in the Senate shortly before the end of the session. It was stagnant for a week.
Senator Kevin Parker, a Democrat in Brooklyn who sponsored the bill, said it was not intended to discourage the industry. “If people want to do cryptocurrency mining in the very open New York state, we need to do it in a sustainable way,” he said.
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New York law came after China cracked down on cryptocurrency mining last year, forcing some businesses to move to the United States.Some miners are now Revive a broken coal-fired power plantOr use low-cost natural gas to power your computer.
In New York, the space available for such businesses is the former power plants scattered in the northern part of the state, which was one of the most polluted and inefficient states in the state. Resuming them reverses the greenhouse gas emission reductions achieved by their shutdown. It will slow the state’s progress towards the legally mandated climate goals, amid growing concerns that it is already behind schedule.
This bill does not affect crypto mining projects that draw power from the grid. However, some supporters say that as the state scrambles to electrify homes, buildings and cars to reach climate goals, they also deprive them of valuable electricity and should be banned. I am saying.
Moratorium also has no effect Existing projects like the ones very much discussed in GreenidgeIn Lake Seneca, despite the fact that residents of the surrounding Finger Lakes area and tourism have endorsed a bill to prevent the establishment of similar projects.
According to Ceres, boutique crypto miners like individuals working at home are also unaffected. This is an important difference aimed at maintaining the potential benefits of cryptocurrencies to those left behind.
The Senate passed a broader version of the cryptocurrency moratorium bill last year, but did not get enough traction in Congress. When the Moratorium proposal resurfaced in 2022, it soon became a hot button as environmental groups updated their pushes and the crypto industry began marshaling their own lobbying during the elections of state legislators. It became a problem.
From left to right, some Democrats facing the possibility of primaries have been pressured to support this and other environmental laws, while others have other energy-intensive industries. While off-hook, he strongly opposed that he would kill employment and unfairly target an industry.
“I don’t think the majority of the members yet understand the industry and the technology,” said Senator Jeremy Cooney, a Democrat in Rochester who opposed the Moratorium. “It’s bigger than cryptocurrencies. It’s about making New York an open and attractive place to do business and engage in new technologies.”
Lobbyists from two domestic groups, the Blockchain Association and the Digital Currency Group, also participated in discussions in New York, seeing the defeat of the bill as needed to avoid the spread of similar laws nationwide.
Still, environmental groups continued to praise it, including Mr. Ceres, who called the Senator directly for lobbying and sent a text message.
Senator Liz Krueger, a high-ranking Democrat in Upper Manhattan, also called a colleague to send a text message to persuade him to switch votes and lobby others directly at the State Capitol on Thursday night. Stated.
“Wise entrepreneurs entering the field of cryptocurrencies will find that they can build better mousetraps and get them to buy if they haven’t destroyed our environment,” she said. rice field.
Ann Bernard contributed to the report.