New York State’s lower chamber passed a bill on Tuesday, imposing a two-year moratorium on crypto mining facilities that use carbon-based fuel to validate proof-of-work (PoW) blockchain transactions. The legislation aims to address environmental issues derived from PoW’s massive energy consumption.
“Not a Ban on Crypto Mining”
Bill A7389C, sponsored by Democratic Assemblymember Anna Kelles, was passed to regulate further PoW miners that use carbon-based energy to mine cryptocurrencies. According to it, no new permits will be issued to such miners for two years; meanwhile, facilities already powered by carbon won’t be able to renew their licenses if they decide to increase the amount of energy they need for mining.
The bill also tasks the Department of Environmental Conservation (DEC) with conducting a comprehensive review of all the crypto mining sites in the state, ensuring that they meet the environmental requirements set by the state.
The moratorium that only targets “electric generating facilities” – like power plants – requiring a DEC permit does not impact individuals mining cryptocurrencies like bitcoin. An earlier version of the bill, which called for a three-year moratorium on a broader scope of mining facilities, did not get passed by the Assembly in June 2021.
Kelles celebrated the bill being passed as part of the “Earthday package,” clarifying that the moratorium is not a crypto ban nor a restriction on crypto mining.
Exactly! The moratorium (not a ban!) will not in any way restrict anyone’s ability to buy, sell, invest, or use crypto currencies in New York State nor will it impact in anyway anyone’s ability to do cryptocurrency mining as long as they’re not buying a power plant to do it. https://t.co/QdNSSDudnX
— Anna Kelles (@annakelles) April 27, 2022
“Wrong Answer to Curb Emissions”
Before the bill was passed, the Blockchain Association had written a petition requesting people to email their representatives to stop such a bill. The organization believes it will kill the crypto mining industry in the state, as miners will simply migrate to neighbored states for operations, eventually resulting in no positive impact on climate change.
The association’s executive director Kristin Smith wrote that pushing miners out of the state is the wrong answer to curb emissions and bring energy prices under control. She worried that the proposed moratorium will “have a chilling effect on the industry’s growth in New York state.”