A New York Fight Over Crypto Mining
Crypto companies are fighting a proposal in New York that would restrict the mining of digital assets, worried that other states might make similar moves, I wrote last week in The Wall Street Journal.
A bill scheduled for a vote this week in a state Assembly committee would for two years prohibit the issuance or renewal of air quality permits for the purpose of crypto mining. The mining uses large amounts of electricity to power computer servers that bid for digital cash by solving complex mathematical equations. Some companies have co-located at power plants, where they can get cheap power that bypasses the electrical grid.
The practice has taken root at led to the reactivation of the Greenidge plant Dresden N.Y., which has become a flashpoint for environmental activists in the Finger Lakes and beyond. “We’re trying to move away from burning fossil fuels,” said Yvonne Taylor, vice president of the conservation group Seneca Lake Guardian. “Resurrecting an old power plant in the middle of that doesn’t make sense.” [Corrected 4/25, 5:56 pm]
Greenidge says its plant employs 50 people and it is “creating high-tech jobs and new careers for Upstate residents in a future-focused sector.” Other companies are looking to establish and expand mining operations in other upstate communities, either taking advantage of cheap hydropower or re-powering plants that shuttered due to lack of demand. That includes Digihost International, which has equipment to reactivate a gas plant in North Tonawanda Tonowanda, POLITICO’s Marie J. French reported. [Corrected 4/24, 9:33 p.m.]
And so the growing cryptocurrency sector is upping its presence at the state Capitol. The Blockchain Association, a group of miners and cryptocurrency exchanges that had mostly focused on Washington, opened an Albany office in March. A group called the Blockchain Security Industry Coalition formed this year and signed lobbying contracts worth $60,000. Coinbase, the largest U.S. crypto exchange, signed a $15,000-a-month retainer on April 1.
“We view the battle going on in New York right now as a litmus test of what other states may do,” said Kyle Schneps, director of public policy for Foundry Digital LLC, which operates a bitcoin mining pool. He, like other crypto representatives, said no industry should be singled out by lawmakers.
As my colleagues Paul Kiernan and Dave Michaels wrote last month, crypto firms and investment funds have hired three former chairs of the Securities and Exchange Commission, three former chairs of the Commodity Futures Trading Commission, three former U.S. senators, and at least one former White House chief of staff as they seek to iinfluence potential regulations in Washington. They’re also raising money for a super PAC that would influence congressional elections, The Washington Post reported.
Assemblymember Anna Kelles, a Democrat from Tompkins County who sponsors the New York moratorium bill, said it was inspired by Greenidge and sets an important limit as the state works to reduce greenhouse gas emissions. No floor votes are currently scheduled in the Assembly or Senate, and Gov. Kathy Hochul said through a spokeswoman that she would “continue to engage with stakeholders and legislators as new actions in regard to cryptocurrency are considered.”
THE WEEK AHEAD: The Court of Appeals will hear the redistricting case on Tuesday morning. New York City Mayor Eric Adams will present his executive budget on Tuesday afternoon.
THE QUESTION: Which of the Finger Lakes was originally called crooked lake?
Know the answer? Drop me a line at jimmy.vielkind@gmail.com. Or just write with thoughts, feedback or to say hi.
THE LAST ANSWER: The first woman elected lieutenant governor of New York is Mary Ann Krupsak, who won a three-way contest in 1974. One of the people she defeated was Mario Cuomo.