New York Assembly approves two-year moratorium on crypto mining

The New York State Assembly’s lower chamber voted for a bill aimed at freezing current levels of carbon emissions from cryptocurrency mining.

The measure provides for a two-year moratorium on issuing new permits for cryptocurrency mining powered by energy generated from hydrocarbon sources. Operations run under this scheme will not be able to expand.

The act also requires the Department of Environmental Conservation to prepare a report on mining’s environmental impact in the state. The study must be completed within a year, giving lawmakers time to act before the restrictions expire.

Democrat Anna Kelles, the sponsor of the bill, explained that it does not ban cryptocurrency mining but affects a limited number of energy facilities.

“This concerns only power plants, we have about 30 in the northern part of the state and roughly 19 in the south,” said Kelles during the discussion.

Republican Robert Smallen called the bill “anti-technology” and “merely a guise of environmental protection.” The move would send the wrong signal to New York’s financial services sector regarding the adoption of digital technologies, he added.

Kelles argued that the measures would not hinder innovation in the sector, as they do not affect other aspects of the crypto industry such as asset trading.

Against the backdrop of the expansion of mining in the United States, entrepreneurs have used the state’s excess power to operate cryptocurrency mining directly at power plants, behind the meter.

One such facility was Greenidge Generation in Dresden. In 2021, the hybrid power plant located on the shores of Seneca Lake (one of the Finger Lakes) faced allegations of negative environmental impacts.

In July of the same year, the company announced plans to expand its mining business, but at a site in South Carolina. Investments in the project will total $264 million.

In April 2022, the New York State Supreme Court rejected the environmentalists’ claims against the power plant.

Republican Representative Philip Palmesano, in remarks during the debate, highlighted Greenidge’s contribution to the economy in terms of taxes and jobs.

Kelles countered that the Finger Lakes region’s agritourism sector, employing about 60,000 people, signals negative impacts from the plant, including noise pollution and water and air pollution.

“How many jobs are we creating for these emissions, how many are we losing? We need to think about balance,” she said.

Ninety-five members voted in favour of the bill, 52 against. A similar measure is under consideration in the Senate.

As reported in February 2022, New York gubernatorial candidate Juman Williams urged the state authorities to ban bitcoin mining and other cryptocurrencies using the Proof-of-Work algorithm.