While many states across the US are leaving no stones unturned to entice crypto mining companies to set up shop in their respective jurisdictions, New York’s lawmakers are moving in the opposite direction.
As the NY State Legislature entered the eleventh hour of its 2022 session, an early morning vote in Albany on Friday passed a bill that potentially will impose a strict 2-year ban on all new crypto mining permits. The bill also intends to ban certain existing mining operations that run on carbon-based power sources, primarily set-ups repurposing fossil-fuel burning plants.
After being passed by the Assembly in April, the bill languished in the Senate for weeks until it was unexpectedly brought back to life and passed just before the Senate adjourned on Friday morning. The Democrat-controlled state Senate is expected to take up the matter shortly before the bill lands on the desk of Governor Kathy Hochul, who will determine its fate.
NY lawmakers backing the legislation have also provided their reasons behind this sudden move. They have clarified that this is being done to curb New York’s carbon footprint by cracking down on mining companies, especially those employing non-renewable resources. Unless a proof-of-work (PoW) mining company can show evidence that they are using 100% renewable energy, they wouldn’t be allowed to expand or renew their permits.
A Draconian Law Or A Well-Thought Move?
While the top brass continues to back their decision, this unexpected move has drawn sharp criticism from the crypto community.
According to Narek Gevorgyan, CEO & Founder of CoinStats, “I’m unsurprised that New York politicians would take a stand against proof-of-work mining, similar to their European peers, but the New York bill epitomizes virtue signaling. I understand that New York has outlined aggressive goals to reduce reliance on fossil fuels, but conflating the matter with mining is short-sighted.”
Gevorgyan stresses, “Not only will this make proof of work mining firms more reluctant to do business in New York, but it will also directly impact the state’s tax coffers. Miners are voting with their feet by moving to friendlier jurisdictions, and the state has already lost considerable revenues by advancing this rather draconian regulation.”
Following China’s clampdown on crypto mining, New York has emerged as a major mining hub. This has led to a sharp rise in the “revival” of broken-down coal mines and low-cost natural gas use as…
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