New York bitcoin crypto mining moratorium is up in the air

As the New York state legislature entered the eleventh hour, its first-in-the-nation crypto mining moratorium bill was still in limbo. Whether it gets a floor vote before the legislative session ends at the stroke of midnight on Thursday will define what happens with the burgeoning crypto mining industry taking over upstate New York.

New York has become a major hub for crypto mining, particularly following a crackdown in China last year. In an effort to stem the opening of a slew of mines, members in both houses of the state legislature introduced legislation last year that would put a two-year moratorium on mining that uses proof of work, an energy-intensive computational technique that keeps the blockchain secure. That bill passed the state Senate but not the Assembly.

The new version was weakened slightly to allow for mines with air pollution permits to keep doing their thing. Two sources offered Protocol conflicting versions of the status of the bill in the state Senate, with one saying it had the votes while another said effort to secure them were ongoing. The fact that the weaker bill may not even get a floor vote reflects the crypto industry’s growing influence in Albany, including donations to Gov. Kathy Hochul.

Miners generally seek out cheap energy to maximize returns, and they found a little slice of heaven in upstate New York, where natural gas and hydropower are abundant. A number of shuttered or nearly shuttered power plants have proven to be particularly attractive as sites to construct vertically integrated bitcoin mines.

But while miners have found heaven, residents have seen places they love become hell. The epicenter of the battle over crypto mining is on the shores of Seneca Lake, the largest of the Finger Lakes. There, Greenidge Generation revived a dormant coal plant built in the 1960s. Retrofitted to burn natural gas, the power plant sends a tiny amount of juice onto the grid and spends the rest of its operating time mining bitcoins.

Residents nearby have complained of noise pollution from the mining rigs’ cacophony. They’ve also said the plant destroys the bucolic character of the region and its burgeoning wine industry. That would all be problematic enough, but the plant will also make it harder for the state to reach its climate goals, particularly if other aging power plants are also retrofitted the same way.

“With this legislation in particular, it put forwards a simple question: In the face of New York’s ambitious climate law, should we be allowing an industry to repurpose fossil-fuel power plants when we’re trying to move away from fossil fuels entirely?” Liz Moran, Earthjustice’s New York public advocate, told Protocol.

The moratorium would put the brakes on that. The version currently under consideration would allow mines with the proper air pollution permits to stay open but forbid new ones from being constructed during a two-year pause. That would allow the state to study the impacts and decide if a full-on ban or other approach makes more sense.

This story is developing and will be updated.