ITHACA, N.Y.—A state bill that would impose a moratorium on certain energy-intensive forms of cryptocurrency mining passed the state assembly and senate near the close of the 2022 legislative session, and is now headed to Gov. Kathy Hochul’s desk. Hochul is now in the position to decide if New York will set a new precedent around the emerging cryptocurrency industry.
On Friday, proponents of the bill appeared optimistic that Hochul would sign the bill. Assemblymember Anna Kelles said that she was optimistic in a press event about the passage of the bill, adding that from conversations she has had with the Governor’s office, Hochul has made it clear that she understands and is “concerned about the energy consumptive practices” of certain types of cryptocurrency mining.
But, as per Zach Williams of the New York Post, Hochul is not ready to step forward with the moratorium bill. With a primary election looming, Hochul said that “We have a lot of work to do over the next actually six months.”
In a written response to The Ithaca Voice’s request for comment, Kelles stated, “Not signing the cryptomining moratorium bill immediately is simply irresponsible. The bill is not retroactive, so delaying will allow mines to open and operate in the interim. Refiring old, inefficient, fossil-fuel based power plants will send New York in the wrong direction, away from our climate goals.”
The moratorium bill before Hochul, championed by Assemblymember Anna Kelles (D-125) and co-sponsored by Sen. Kevin Parker (D-Brooklyn), targets cryptocurrencies that use proof-of-work validation, which is the most energy-intensive form of mining. Bitcoin, the cryptocurrency that has the highest market cap, uses a proof-of-work validation. But, notably, would prevent crypto mining companies from purchasing power plants for their operations. Cryptocurrency mining operations currently established at power plants would not be affected by the moratorium.
“In essence this bill is a power plant bill,” said Kelles.
Environmental advocates have been ringing the alarm bell since early 2021 about the intense energy demands of cryptocurrency mining since a gas-fired power plant in Dresden, N.Y., Greenidge Generation Holdings began to burn fossil fuels to mine bitcoin. Advocates spell out the potential of other power plants being converted into crypto mining facilities which would endanger New York State’s ability to reach its carbon emissions reduction targets set in the Climate Leadership and Protection Act (CLCPA).
Seneca Lake Guardian, an environmental watchdog organization originally formed to fight fracking from entering New York State, has been at the forefront of the call to regulate cryptocurrency mining. Seneca Lake Guardian’s Vice President, Yvonne Taylor, framed the crypto moratorium as Hochul’s “fracking moment,” likening it to the moratorium that former Gov. Andrew Cuomo passed on hydraulic fracturing in 2014.
The cryptocurrency moratorium bill’s underlying concept has been lambasted by crypto-boosters, like Jack Chervinsky, the head of policy for Blockchain Association, a cryptocurrency focused trade association that lobbies politicians.
“Good policy requires reality-based thinking: honest analysis of costs & benefits, of opportunities & risks, of first- & second-order effects. The NY mining ban does none of that. It’s a moral victory for a few, detached from reality,” wrote Chervinsky on Twitter, stating that he hoped Hochul would veto the bill.
Hochul’s campaign funds have seen some contribution from the cryptocurrency industry, with Coinmint’s CEO Ashton Soniat donating $40,000. Lobbying firm Ostroff Associates, which represents cryptocurrency client Blockfusion, also contributed $78,000 to Hochul’s campaign. Hochul has notably raised over $10 million for her campaign for governor, as per the last reporting period.
Another important component of the moratorium bill is that it would compel the New York State Department of Environmental Conservation (DEC) to conduct a study on the number of proof-of-work cryptocurrency mining operations in the state as well as their future energy demands.
“We think this bill is common sense. This is modest. Governor Hochul should not hesitate in signing this,” said Kelles.
UPDATE: Kelles was not immediately able to respond to The Voice’s request for comment at the time of this story’s publication. Her comment featured in the 4th paragraph of this story was added at 1:45pm on 06/07/2022.
CORRECTION: This article incorrectly stated that Greenidge Generation was in Dresden, Germany, rather than Dresden, N.Y..