New Arkansas laws regulate cryptocurrency mining

Gov. Sarah Huckabee Sanders has signed two laws regulating cryptocurrency mining in Arkansas, following months of outcry from lawmakers and their constituents.

Much of the push for mining regulation comes from a woman named Gladys Anderson. She lives next to a crypto mine in Bono, a neighborhood near Greenbrier. It’s a rural farming community, where residents say they woke up one day to hear a constant shrieking and humming sound coming from the mine.

Anderson lives closest to it, just a few hundred feet away. Her story has since gone national; speaking on CBS News, she called the noise “torture.”

The criticisms of these machines, which generate cryptocurrency like Bitcoin, fall into three buckets; they’re too loud, they’re bad for the environment, and they have foreign ownership ties that make a lot of people uncomfortable.

The Arkansas Legislature’s fiscal session, which formally adjourned last Thursday, was designed by law to focus only on budget matters. But, this year, lawmakers made an exception for this one issue.

One of the bills was championed by Sen. Joshua Bryant, R-Rogers, who explained his support for the legislation this way.

“Once they’re up and operating under existing ordinances/laws that they don’t just get arbitrarily or capriciously banned,” he said.

In the 2023 legislative session, Bryant sponsored a bill which later became Act 851. The law almost entirely deregulated the mines, prohibiting local governments from putting restrictions on them. Since then, there has been an influx of crypto mines in Arkansas and, with them, controversy about the noise and operations. Bryant says he doesn’t want to repeal that law.

“Repeal really wasn’t the option. What was the option was to create a state framework like we did with auto racing in the ’90s, with auto and gas compressors in the 2000s, to have some state oversight on this industry in order to control it when counties don’t want to step up and do it themselves,” he said.

Bryant says he just wants to give counties the power to regulate the mines, as well as the state if counties choose not to. He says he’s met with leaders in the crypto industry, and doesn’t think the practice is inherently bad. He wants to crack down on “one or two bad actors.”

“[If] they would have complied or been better neighbors a year ago, this wouldn’t have really be a conversation,” he said. “Because crypto mines have been operating in our state for over a decade.”

The first new law allows the mines to operate if they comply with noise ordinances. They have to be 2,000 feet from a residence and can’t be controlled by a “prohibited foreign party-controlled business.” The second new law subjects mines which break the rules to civil penalties.

One of the few lawmakers to vote against the bills was Rep. Andrew Collins, D-Little Rock. He doesn’t like the part of the bill that bans foreign ownership of the mines. There is some evidence tying crypto mining in general to the Chinese government.

Collins says this could be a slippery slope.

“We need to be very careful when we say that somebody can’t do something, or doesn’t have the right to either own property or exercise the right to make a living based on being in a category,” he said.

Collins asked Bryant, who sponsored one of the bills, about this during a committee meeting.

“Effectively, if you’ve got somebody from, say, Venezuela, and they are trying to move to America and they are trying to become a citizen and they are functioning within the confines of the law, completely innocent, no issue. They are not allowed to make an investment.”

Bryant didn’t share his concerns.

“If you come here and you open a facility here that uses our natural resources, that has potential cyber security threats to our grid and other entities, and you are connected to said grid, where do your loyalties lie and what will they be asking of you?”

Collins said he wanted to see better evidence than what he heard in Byrant’s answer. He also says the laws don’t actually address one of the biggest issues; they don’t turn down the noise.

“[The] only thing that a crypto mine operator has to do is apply noise reduction techniques,” Collins said. “They can be very ineffectual.”

One of the laws lists examples of things such as liquid cooling which could be used to keep the mines quiet. But, it doesn’t force the mine’s owners to turn the sound down. Bryant says he is enforcing an industry standard.

“A lot of my colleagues didn’t want the government to control the noise,” he said. “Some thought if you live in a county and the county does not want to pass any ordinances that require, as a whole, the community to mitigate their noise, why are we telling a business to do something that we are not telling everybody to do?”

Gladys Anderson, who lives next to the Bono crypto mine, said she doesn’t trust what Bryant says about the law. But, she says she is trying to remain positive about it.

Faulkner County passed an ordinance capping noise at 60 decibels, a level both Anderson and Little Rock Public Radio have measured the mines exceeding. She is joining with other residents in her community to sue over the noise. Bryant says, because of the new laws, she now has options.

“They’ve got 90 days to comply. I think it will solve the issue. If not, the state will have jurisdiction once the rules are promulgated, or the community of the surrounding neighbors will have standing in court to make sure they follow one of those noise mitigating procedures.”

An attorney representing owners of the Bono cryptocurrency mine did not respond to Little Rock Public Radio’s request for comment.