As Crypto Financial World Burns, New York Passes Law Preventing Crypto Miners From Burning More Fossil Fuels | Goldberg Segalla

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Weeks after her election as New York’s first female governor, and days before New Yorkers would sit down for Thanksgiving dinner, Governor Kathy Hochul finally signed a conservation moratorium Nov. 22. environment on new cryptocurrency mining operations, which both houses of the state legislature passed over the summer. (Progress on the bill has been tracked and reported by ELM all year, most recently here.)

For two years, the law will prohibit crypto mining companies from using the energy-intensive “proof-of-work” method of minting cryptocurrencies – (as explained in more detail by ELM here) – unless the company mining uses 100% renewable energy. This is the first moratorium on crypto mining in the United States.

The goal is to dramatically slow the explosive growth of the crypto-mining industry in upstate New York, which has led to increased emissions from the use of carbon-based fuels for mining. perpetual exploitation of mining operations. Hochul explained that the law was necessary, given that the state’s goal is to significantly reduce its carbon footprint, largely by complying with its Climate Leadership and Community Protection Act which aims to reduce carbon emissions from New York by 85% by 2050, and is one of the most ambitious climate and clean energy laws in the nation.

The Moratorium Act also provides for a study to be undertaken by the New York Department of Environmental Conservation to assess the impacts of the crypto mining industry on the environment.

Crypto mining advocates, however, are not happy. They claim the law will scare off crypto companies, which will be more attracted to other states to expand the booming industry. This, they say, will leave New York with a hole in its local economy, which has always been supportive of innovative financial tools, and send potentially lucrative jobs elsewhere, such as Texas, Wyoming or North Dakota. Additionally, according to proponents, crypto mining companies are at the forefront of renewable energy development, so penalizing them for failing to meet unrealistic demand would actually make it more difficult to meet its energy goals. of renewable energies.

Hochul isn’t convinced that crypto is the economic opportunity New York should be investing in right now. In her statement announcing the signing of the bill, she acknowledged that “As the first governor of upstate New York in nearly a century, I recognize the importance of creating economic opportunity in communities that have been left behind” and promised to invest in the economic future. development projects. Also, since New York, much like its neighbor New Jersey, often passes bills that the rest of the country’s states ultimately model their own legislation on, it’s likely that more states will pass bills. similar, giving crypto miners fewer options for development if they don’t want to decrease their current energy needs.

This new development came on the heels of the implosion of much of the crypto market, with crypto exchange FTX dramatically collapsing before its merger with rival crypto exchange, Binance.

FTX filed for bankruptcy protection last month, just 3.5 years after the famed crypto firm was founded. It remains to be seen whether the industry-wide financial woes will make it even easier for states to follow in New York’s footsteps and pass crypto-limiting legislation in a legislative environment more conducive to goal expansion. environmental.

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