New York Assembly Passes Anti-Mining Bill – Fin Tech


To print this article, just sign up or sign in to Mondaq.com.

On April 26, 2022, the New York Assembly passed a two-year moratorium on certain cryptocurrency mining operations that use Proof of Work (POW) authentication methods to validate chain transactions. blocks (e.g. Bitcoin). The theory behind the bill is that the continued expansion of “cryptocurrency mining operations that run working test authentication methods to validate blockchain transactions will affect compliance with the Climate Leadership and Community Protection Act.” , which forces New York to substantially reduce the greenhouse effect. gas emissions.

Limited impact of the mining moratorium in New York

Some reports describe this bill as an absolute ban on prisoner-of-war mining operations in New York. That is incorrect. The bill has a much more limited scope. First, the bill would ban the issuance of new air permits and the renewal of existing ones. The bill would not affect the mining operations of prisoners of war currently operating, whose air permits do not need to be reviewed within the moratorium period (air permits can be issued for up to five years). Second, new and renovation permits would be banned only for “a power generation facility that uses a carbon-based fuel.” This means that mining operations using POW are not affected if alternative energies are used, such as wind, solar, hydro or other renewable energy sources.

Although the bill does not create a mining ban, as some believe it will, it could cause serious and lasting damage to the New York mining industry. Assemblywoman Anna Kelles drafted the bill in response to a privately held company that converted a defunct coal-fired power plant to operate on natural gas and then use the energy generated to extract cryptocurrency. Mining operations may hesitate to invest substantial capital in New York if they fear that their operations will be closed at any time due to changes in the New York regulatory landscape.

Environmental Impact Assessment of Mining in New York

The bill also calls on the New York State Department of Environmental Conservation, in consultation with the New York State Department of Public Service, to prepare a generic environmental impact statement on cryptocurrency mining operations using POW. The statement would address, at least in New York:

  1. The number and location of existing cryptocurrency mining operations using POW.

  2. The amount of electricity consumed by each cryptocurrency mining operation that POW uses.

  3. The sources of electricity and the types of fuel consumed to power each cryptocurrency mining operation that POW uses.

  4. The amount of greenhouse gas emissions and co-pollutants released as a result of cryptocurrency mining operations using POW.

  5. The projected increase in the number or expansion of any cryptocurrency mining operation that uses POW.

  6. The potential impacts of electricity consumption by cryptocurrency mining operations that use POW on New York capacity to meet its greenhouse gas emission reduction targets.

  7. The amount of water use, water quality, and other environmental impacts of cryptocurrency mining operations that use POW.

  8. The potential impacts on public health in communities close to cryptocurrency mining operations using POW.

  9. The potential statewide public health impacts of the increase in greenhouse gas emissions due to cryptocurrency mining operations using POW.

  10. The social and economic costs and benefits of cryptocurrency mining operations using POW.

It remains to be seen how the responsible departments would try to accurately assess some of the above categories of information. But if this environmental impact statement is prepared, its methodology and conclusions could provide valuable insight into what those receptive departments to the mining industry in New York will look like. It could also become a model for how other states examine their own support for mining.

The bill is yet to be considered by the New York State Senate.

The content of this article is intended to provide a general guide to the subject. Expert advice should be sought on your specific circumstances.

POPULAR ARTICLES ON: United States Technology

The SEC’s application is duplicated in crypto

Arnold & Porter

On April 4, 2022, Gary Gensler delivered a speech discussing the need for the U.S. Securities and Exchange Commission (SEC) to increase the regulation and enforcement of the cryptocurrency market by approximately $ 2 trillion.

NYSBA Tax Section Encryption Recommendations

Cadwalader, Wickersham & Taft LLP

On April 18, 2022, the Tax Section of the New York State Bar Association (“NYSBA”) published its second report on cryptocurrencies and digital assets (“the Report”). The Report recommends:



Source link

Leave a Comment

Your email address will not be published.