MicroStrategy's Significant Bitcoin Impairment Losses May Mislead: Berenberg

Turkish Crypto Exchange Thodex CEO Faruk Özer Sentenced to 11,196 Years in Prison for Collapse

DeFi and Credit Risk

New York legislators have introduced a contentious measure that would impose a two-year embargo on some proof-of-work crypto mining companies in the state.

At a hearing on Monday afternoon, members of the New York Assembly's Ways and Means Committee debated the measure before deciding to submit it to the whole Assembly for a vote.

Despite widespread misconceptions that the measure will outlaw all crypto mining in New York, the bill's reach is quite limited. It will impose a two-year prohibition on the issuing of new licenses for proof-of-work mining enterprises that propose the use of a "electric generating plant that uses a carbon-based fuel" if enacted.

The bill also calls for a study by the New York State Department of Environmental Conservation on the impact of proof-of-work mining on the state's ability to meet the Climate Leadership and Community Protection Act's ambitious climate goals, which call for a reduction of New York's greenhouse gas emissions by 85 percent by 2050.

If passed, the bill could be a major roadblock for mining companies like Greenidge Generation, which recently reopened a decommissioned coal power plant in upstate New York and converted it to run on natural gas to power its bitcoin mining operation – a move that has sparked debate among lawmakers and environmental groups.

Greenidge Generation's current operation would be unaffected by the law because its permission application is still pending, but it would be unable to grow, and future mining enterprises wishing to imitate the Greenidge model would be denied.

Existing proof-of-work mining operations and those planning to harness the state's copious – and inexpensive – renewable energy sources would be unaffected by the measure. Crypto miners have discovered industrial power as cheap as 1.9 cents per kilowatt hour in some sections of New York state, where energy is provided by the Niagara River and other hydropower sources. According to Statista, the average cost per kilowatt hour in the United States was 7.26 cents.

A previous version of the law, which failed in the state Assembly last year due to opposition from the electrical workers' union, called for a three-year ban on all crypto mining in the state.

Despite the bill's restricted scope, crypto proponents are afraid that its adoption could pave the way for future legislation in New York that will tighten down on crypto mining, potentially harming the crypto business across the state.

"A two-year mining prohibition sends a pretty poor message to the blockchain business, crypto firms, and Web 3 companies, saying 'You're not welcome here,'" said John Olsen, the Blockchain Association's New York state head.

According to people acquainted with the situation, the full Assembly vote might happen as soon as Thursday. The bill will then be sent to the state Senate if it passes there.

========

Related Video: