The New York State Legislature has passed a pair of bills in the Senate and Assembly that, if signed by Governor Kathy Hochul, would impose a two-year ban on issuing new air permits to cryptocurrency mining operators in New York.
Specifically, New York lawmakers, urged by environmental groups, are targeting the use of the “Proof-of-Work” cryptocurrency transaction authentication process, which has been beleaguered by claims of being energy-inefficient. Two of the leading cryptocurrencies, Bitcoin and Ether, have continued to rely upon this process for its increased security.
In addition to a moratorium on issuing new permits, existing permit renewal applications will not be granted if those permits seek to increase the amount of electricity used in the mining operations. The New York Legislature’s goal is to limit increases of greenhouse gas emissions that result from cryptocurrency mining operations that use electricity from carbon-based fuel electrical generating facilities. The bill will also direct the Department of Environmental Conservation to conduct an environmental impact assessment of cryptocurrency mining operations in the state.
If enacted, the law will be one of the first and strictest regulations impacting cryptocurrency mining operators in the United States, and will significantly impact current and potential operators.
Connell Foley will continue to monitor these developments regarding the potential moratorium on cryptocurrency mining permits in New York and related issues.