NIAGARA FALLS, NY - An explosion and subsequent fire rocked a Blockfusion crypto mining facility in New York state last week, causing thousands of mining rigs to go offline.
About three miles away, another bitcoin mine owned by U.S.-based Bitcion Corp. had previously drawn the ire of some residents for being too noisy.
As a result, the city of Niagara Falls has imposed a moratorium on new bitcoin mining operations while it works on ordinances to control the impact on the local community.
The new laws will likely include zoning requirements to ensure crypto mines aren't too close to residential areas, Niagara Falls Mayor Robert Restaino said Thursday in a phone interview with CoinDesk. "We have what we think is the final draft of the proposed amendment," the mayor said. As for next steps, he said the draft will go to the city planning board before going to the City Council for a final vote.
Most residents near the Block Fusion site told CoinDesk they heard the explosion but were not too concerned, and the resulting fire was quickly extinguished. Teresa Chapelle, who lives about a half-mile away, said she not only heard the explosion but felt it in her home.
Marlene Maikranz, who was having dinner with her children in her backyard at the time - which has a direct view of the block fusion plant about 400 yards away - said the explosion so startled her and her children that she brought them inside to avoid breathing in the fumes. Such explosions, however, were more common several years ago when the plant operated as a power plant, she said.
Maikranz posted photos of the incident on her personal Facebook page, showing the date of the explosion as May 10.
Blockfusion USA is a New York City-based company, and the mining facilities it hosts at its Niagara Falls site are owned by Nasdaq-listed Bit Digital (BTBT), which reported the incident in a report to the U.S. Securities and Exchange Commission yesterday.
Bit Digital noted that power to 2,515 Bitcoin miners and 710 Ethereum miners was disrupted, but the explosion and fire did not seriously damage the machines or the building.
The company blamed "faulty equipment from the utility" for the explosion and said it - along with Blockfusion - intended to "pursue claims, including seeking reimbursement for lost revenue."
"How the matter is resolved between the utility and its customer, I think, will be the subject of a lot of discussion," Mayor Restaino said, adding that the fire department was not called to the scene to investigate and was merely responding to the incident. Police were not involved, the mayor's office said.
The city's biggest concern, Restaino said, is that such facilities are operated in compliance with local laws, particularly regarding electrical services and permits. "This was really the failure of a lot of these [crypto miners]."