Governor Kathy Hochul has signed a first-in-the-nation cryptomining moratorium. It comes less than two weeks after the collapse of FTX, a cryptocurrency exchange that saw a high-profile demise.
The moratorium puts a two-year pause on new and renewed air permits for fossil fuel power plants that house ‘proof-of-work’ cryptocurrency mining and will require the state’s Department of Environmental Conservation to conduct a study into the practice’s environmental impacts. Proof-of-work is the blockchain-based algorithm used by bitcoin and a few other cryptocurrencies.
“I will ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of our environment,” Governor Hochul said after signing the bill into law.
Crypto advocates said the move would crimp New York’s economic development on that front, and unfairly singled-out that fossil fuel use. Mining bitcoin requires specialized computers and a large amount of energy. That energy use has been roundly criticized, and is part of local focus as Greenidge Generation in Dresden heats up parts of Seneca Lake.
Seneca Lake Guardian, one of the lead advocacy groups who pushed for Hochul to sign the bill, celebrated the step, but urged her to ‘finish the job’. They called on the Governor to shut down existing bitcoin mines – including Greenidge Generation and Foristart North Tonawanda.
“Thank you, Governor Hochul, for stepping up to protect New Yorkers from corporate bullies who want to exploit communities like mine in the Finger Lakes. The crypto industry is going to whine that this is a blow, but it’s not,” Yvonne Taylor, Vice President of Seneca Lake Guardian said in a statement. “Governor Hochul did the right thing by putting real New Yorkers over the failing outside speculators who choose not to mine crypto in more efficient ways that don’t destroy the climate, environment, and local economies.”
Bitcoin has plummeted in value this year – dropping more than 65%. The high-profile collapse of FTX, a cryptocurrency exchange, has been at the center of headlines for the last two weeks. Even locally, Greenidge Generation’s financial woes have continued through the year. The company’s stock has plummeted and risks being delisted by NASDAQ. In total, the company has lost $44 million this year and saw it’s CEO step down.
All of this coming before Governor Hochul signed the bill into law.
“During the last legislative session, we passed this bill through the Senate and the Assembly despite enormous financial pressure by the crypto industry to kill the bill,” bill sponsor Assemblymember Anna Kelles said. “This bill will create the pause we need in the current trend of purchasing old power plants in NY for corporate profits and allow us to properly evaluate the impact of this industry on our climate goals before it is too late. We know that we must reduce our total global greenhouse gas emissions by 50% in the next seven years to avoid the worst impacts of climate change. Reactivating old retired power plants that use fossil fuels as an energy source is a move in the wrong direction and we cannot afford to go backwards.”