New York Senate approves Bitcoin Mining Moratorium

The New York State Senate passed a bill targeting proof-of-work (PoW) mining early Friday morning in an effort to address some of the environmental concerns seen around cryptocurrencies.

The bill, which was passed by the state Assembly last month, would impose a two-year moratorium on any new PoW mining projects powered by carbon-based fuel in the Empire State, though existing mining firms or ones currently undergoing the permit renewal process would be allowed to continue operations. The Senate voted in favor of the bill 36-27.

Senator Kevin Parker, the Democratic sponsor of the bill, stated that there is currently one such plant in operation. This would not be affected by the bill. He also stated that one application is pending, which could be placed on hold while the study is completed.

The state will conduct an environmental study about the possible impacts of proof-of work mining during the moratorium.

Many expected the bill to die in committee – the fate met by last year’s version of the bill – after the Senate Environmental Conservation Committee declined to consider the bill during its last meeting of the session. The committee’s chair, Sen. Todd Kaminsky, told CoinDesk in May that he was worried the bill could lead to “deleterious economic consequences for New York if people perceive it as being hostile to crypto.”

However, an eleventh hour referral of the bill from the Environmental Conservation Committee to the Senate Energy and Telecommunications Committee (which is chaired by the bill’s sponsor, Senator Parker) on Thursday evening meant that the bill was able to reach the full Senate floor for a vote mere hours before the close of the legislative session at midnight.

The bill must be signed by Kathy Hochul, New York Governor, before it can become law.

Because of its low cost hydroelectric energy, New York is a popular place to establish crypto mining companies. Mining firms have also used defunct coal power generator facilities in recent years. Greenidge Generation, for instance, has rehabilitated one of these facilities to run on natural gas.

The crypto industry rallied against the bill after its Assembly counterpart was introduced last May, with many industry advocates calling the proposal a “ban” on mining outright.

John Olsen, a lobbyist with the Bitcoin Association, told CoinDesk last month that he feared the moratorium could be extended or turned into a ban over the course of the next two years, which could drive away companies seeking to set up shop near New York’s cheap energy sources.

Mining companies based in New York 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 was the acting president and chief strategist officer of industry trade association BaSIC. He told CoinDesk that the bill’s passage “is a dark day for blockchain technology, effectively closing the door on a nascent sector.”

Separately, the Senate passed a bill that would create a “cryptocurrency and blockchain study task force” early Friday.

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