New York crypto mining bill: Senator Anna Kelles interview

New York State Assemblymember Anna Kelles is tired of all the fear-mongering about the bill she wrote — and sponsored — to place a two-year moratorium on certain types of new cryptocurrency mines in the state. The fate of the measure, which passed the state senate in the wee hours of Friday morning, rests in the hands of Governor Kathy Hochul, who could sign it into law or veto it.

“It’s important to understand that it’s not a ban,” Kelles said in a call with CNBC on Friday.

“It’s like a three-page bill. So it would be wonderful to just have people read it, but it often ends up being an interpretation based on emotions.”

The legislation aims to curb the state’s carbon footprint by cracking down on crypto mines that meet very specific criteria.

For one, they need to use the energy-intensive proof-of-work authentication method to validate blockchain transactions. Second, they must draw electricity from power plants that burn fossil fuels. Within that subcategory of mines, the measure only applies to those looking to expand or renew permits, while new entrants would not be allowed to come online.

Proof-of-work mining, which requires sophisticated gear and a whole lot of electricity, is virtually synonymous with bitcoin. Ethereum is switching to a less energy-intensive process, but will still use this method for at least for another few months.

“If there is a cryptocurrency mining operation, like there is one in Syracuse, where there are thousands of cryptocurrency mining computer processors, and they are directly tied into the grid: It is not a moratorium on that facility,” explained Kelles, who disclosed to CNBC that she does not own any cryptocurrencies but actively researches the sector.

In addition, it won’t affect existing operations in power plants because it’s not retroactive, nor will it impact “boutique or small-scale cryptocurrency miners that are doing, you know, four, five, ten, twenty computers in their basement,” she said.

Kelles says that her bill is essentially just a big pause button, designed to halt the actions of a corner of the state’s crypto mining industry running on coal- and natural gas-based power plants. Those energy sources interfere with the state’s aggressive climate laws requiring it to become net-neutral in its greenhouse gas emissions by 2050.

“It’s very narrow, and it won’t, in any way, affect anyone’s ability to buy, use, sell or invest in any cryptocurrency, including any cryptocurrency that is based off of proof-of-work validation methods like bitcoin,” continued Kelles.

The crypto mining industry has banded together to challenge the legislation.

Miners tell CNBC that even though this bill is relatively narrow, they’re concerned about the possibility of regulatory creep.

“A moratorium and ban on how a miner sources energy — behind the meter versus grid — is not hospitable to miners,” said…