NY Gov Signs Crypto Mining Ban
And Enviro Activists Won't Stop There
What Just Happened
New York Governor Kathy Hochul, recently elected to her first full term, this week signed into law a bill that would impose a two-year moratorium on proof-of-work crypto mining in the state.
The bill states that the Department of Environmental Conservation shall not approve any new air permit applications, nor any renewal requests, for crypto mining facilities that use the proof-of-work mechanism and use carbon-based fuels. The measure would apply to facilities of “substantial size,” meaning that small home-based miners would not be affected.
Cryptocurrency mining operations that used renewable energy sources, such as solar, hydro or wind power, would be exempt from the moratorium.
Let’s Back Up
In May I wrote about this bill as it was heading to the State Senate for a vote, having previously passed the Assembly. Proponents of cryptocurrency mining were holding a rally at the capitol in Albany to encourage more study before enacting a ban or a moratorium.
The bill also passed the State Senate. Hochul stated at the time that she would not be looking at it until “later in the year.” As in, after Election Day.
Then in July, New York State fired another shot at the crypto industry when it denied the renewal of an air permit for the Greenidge Generating Facility, which operates with natural gas in the Finger Lakes Region. While it appeals the DEC’s decision, Greenidge continues to operate the former coal-fired plant on the shores of Seneca Lake.
The company stated, back in July, “We can continue running uninterrupted under our existing Title V air permit, which is still in effect, for as long as it takes to successfully challenge this arbitrary and capricious decision.”
Crypto Proponents Weigh In
Advocates for Bitcoin and crypto reacted with disappointment and also offered up relevant comments and constructive suggestions.
Heather Bricetti Mulligan, president of the Business Council of New York State, said the state should not “seek to categorically limit the growth and expansion of any business or sector in New York.” She stated that her organization plans to engage and help educate lawmakers regarding the industry and how it can benefit the economy.
The Chamber of Digital Commerce said in a statement that it was “severely disappointed” by Hochul’s decision. Their statement also contained these very powerful observations:
“No other industry in the state has been sidelined like this for its energy use. This is a dangerous precedent to set in determining who may or may not use power.”
An Albany Times Union article on Hochul’s signing of the bill contained some statements that attempted to tie the cryptocurrency technology to the implosion and fraud of the FTX crypto exchange and Sam Bankman-Fried. It’s not clear how the embezzlement of investor assets at FTX has any relevance to the mining story.
The article, by Joshua Solomon, also talks about Bitcoin’s price having dropped quite a bit from its all-time high. Again, not relevant to mining and in fact, the price drop is similar to most tech stocks in general. Side note, FTX held no Bitcoin whatsoever. The Bitcoin network is unaffected.
Environmental Activists Aren’t Done
Though celebrating Hochul’s move, environmental activists say they are pushing ahead to have all existing crypto mining plants closed. New York State is home to only two gas-operated mining facilities. Besides the Greenidge plant, there is the Fortistar power plant in North Tonawanda, near Hochul’s hometown of Buffalo.
These two plants were operating before the moratorium, so they continue to run, but will face stiff opposition from DEC when they apply to renew their Title V Air Permits.
Richard Schrader, policy director for the Natural Resources Defense Council stated flatly, “They should be shut down.”
Legislators Had Offered Up a Compromise Bill
Back in March, the New York State Assembly had passed a bill to direct the New York State Department of Financial Services to establish a task force to study crypto mining, without imposing a moratorium. Introduced by Clyde Vanel (D), measure A09275 would propose studying various aspects of cryptocurrency, including consumer and investor protections. The bill passed the Assembly by a vote of 122-25 on March 28.
The New York State Senate also passed the bill, on June 2, overwhelmingly, by a vote of 61-2. Bipartisan support in both chambers.
Though the bill appealed to legislators on both sides of the aisle, Hochul vetoed the bill just last week. No reasons were given by the Governor’s office.
Where Do We Go From Here?
A two-year moratorium does little more than kick the can down the road. Politicians are good at that.
Anyone who’s studied the cryptocurrency industry and its technology knows that it isn’t going away. Consider these comments:
“This (Bitcoin) isn’t going to stop. Crypto mining may move somewhere where there is little or no concern for the environment.” - Ken Pokalsky, Vice-President, The Business Council of New York State.
“New York should not squander the opportunity to lead the nation in innovation.” - Assembly Member Addie Jenne.
“We can’t stop the conversation with a moratorium.” - State Senator Jeremy Cooney.
Thanks for reading, as always. Please share the newsletter, with friends, on Twitter, anywhere.
Recommended Bitcoin Tools, Platforms, Podcasts:
Gemini - My choice for buying and HODLing Bitcoin, rated tops for safety and security. User-friendly platform and phone app. Earn Bitcoin rewards as well with the Gemini Credit Card.
Arculus - The crypto hardware wallet from Arculus is one of the best products on the market for storing your coins. Very easy to set up and to use, and very affordable.
Lolli - The Lolli shopping app lets you earn great Bitcoin rewards on practically everything you buy, whether you’re shopping on your phone, computer, or in-person.
Twitter - Follow The Bitcoin Files on Twitter at @BitcoinNewslet1 for all of my articles, commentary and links to my contributions to Bitcoin Magazine.
Medium - Check out my writings on Medium, including articles not featured in the newsletter. Join my 550 other followers who read and write about crypto. medium.com/@rickmulvey
Podcasts - To hear the top names in Bitcoin, and learn more than you could imagine, check out The Pomp Podcast with Anthony Pompliano, What Bitcoin Did with Peter McCormack, and The Wolf of All Streets Podcast with Scott Melker.
Issue No. 85, December 2, 2022
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.