New York Senate Passes Bitcoin Moratorium

New York Senate Passes Bitcoin Moratorium

The state Assembly has already passed the bill, which would ban new mining operations powered by carbon-based energy sources for two years.

The New York State Senate passed a proof-of-work mining bill early Friday morning in an effort to address some of the environmental concerns surrounding cryptocurrencies.

The bill, which passed the state Assembly last month, would impose a two-year moratorium on all new PoW mining projects using carbon-based fuel in the Empire State, although existing mining companies or those currently in the process of permit renewal would be allowed to continue operations.

According to the bill's Democratic sponsor, Senator Kevin Parker, there is only one facility currently operating that would not be affected by the bill. He added that there is one pending application that could be put on hold until the study is completed.

During the moratorium, the state will conduct a study on the potential environmental impacts of proof-of-work mining.

Many expected the bill to fail in committee - the same fate befell last year's version of the bill - after the Senate Environment Committee declined to take up the bill in its final session of the session. The committee's chairman, Senator Todd Kaminsky, told CoinDesk in May that he was concerned the bill could lead to "harmful economic consequences for New York if people perceive it as anti-crypto."

However, the bill was referred from the Environment Committee to the Senate Energy and Telecommunications Committee (which Senator Parker chairs) at the last minute on Thursday night, allowing the bill to come up for a vote in the Senate just hours before the midnight deadline.

New York Governor Kathy Hochul still must sign the bill into law.

New York has long been considered a location for crypto mining companies to set up shop due to cheap hydroelectric energy sources. In recent years, mining companies have also repurposed abandoned coal-fired power plants. Greenidge Generation, for example, converted one such plant to run on natural gas.

The crypto industry lobbied against the bill after its counterpart was introduced in the Assembly last May, and many industry advocates called the proposal a "ban" on mining.

John Olsen, a lobbyist for the Bitcoin Association, told CoinDesk last month that he feared the moratorium could be extended or turned into a ban over the next two years, driving away companies looking to set up shop near New York's cheap energy sources.

New York-based mining companies have threatened to leave the state if the moratorium is passed, pointing to the comparative ease of doing business in more mining-friendly states like Texas.

Clark Vaccaro, acting president and chief strategy officer of industry organization BaSIC, told CoinDesk that the bill's passage "is a dark day for blockchain technology as it slams the door in the face of an emerging industry."

Separately, the Senate passed a bill early Friday that would establish a "working group to study cryptocurrencies and blockchain."