New York governor signs law cracking down on bitcoin mining
These machines, known as mining rigs, work round the clock to find new units of cryptocurrency.
Benjamin Hall | CNBC
New York Gov. Kathy Hochul signed a law Tuesday banning certain bitcoin mining operations that run on carbon-based power sources. For the next two years, unless a proof-of-work mining company uses 100% renewable energy, it will not be allowed to expand or renew permits, and new entrants will not be allowed to come online.
“It is the first of its kind in the country,” Hochul said in a legal filing detailing her decision.
related investing news
The governor added that it was a key step for New York, as the state looks to curb its carbon footprint, by cracking down on mines that use electricity from power plants that burn fossil fuels. The law also comes as the crypto industry reels from the implosion of Sam Bankman-Fried’s FTX, which was once one of the most popular and trusted names in the industry.
New York’s mining law, which passed the state assembly in late April and the state senate in June, calls for a two-year moratorium on certain cryptocurrency mining operations which use proof-of-work authentication methods to validate blockchain transactions. Proof-of-work mining, which requires sophisticated gear and a lot of electricity, is used to create bitcoin, among other tokens.
Industry insiders tell CNBC it could have a domino effect across the U.S., which is currently at the forefront of the global bitcoin mining industry, accounting for 38% of the world’s miners.
“The approval will set a dangerous precedent in determining who may or may not use power in New York State,” the Chamber of Digital Commerce wrote in a statement.
It is a sentiment echoed by Kevin Zhang of digital currency company Foundry.
“Not only is it a clear signal that New York is closed for business to bitcoin miners, it sets a dangerous precedent for singling out a particular industry to ban from energy usage,” said Zhang, Foundry’s senior vice president of mining strategy.
The net effect of this, according to Perianne Boring of the Chamber of Digital Commerce, would weaken New York’s economy by forcing businesses to take jobs elsewhere.
“This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State,” Boring previously told CNBC.
As for timing, the law took effect after governor signed off.
The irony of banning bitcoin mining
One section of the law involves conducting a statewide study of the environmental impact of proof-of-work mining operations on New York’s ability to reach aggressive climate goals set under the Climate Leadership and Community Protection Act, which requires New York’s greenhouse gas emissions…
Read More: New York governor signs law cracking down on bitcoin mining