Crypto Mining Moratorium Faces Stiff Headwinds in Albany
The New York State Assembly voted to pass the bill last week, but a fresh wave of opposition from industry and lawmakers alike could make the Senate battle much more difficult.
A bill that aims to put a two-year moratorium on certain types of proof-of-work crypto mining in New York is facing a fresh wave of pushback from industry leaders, lobbyists and lawmakers.
The New York State Assembly version of the bill, sponsored by Democrat Anna Kelles, passed last week. But the Senate version still faces numerous hurdles before potentially being signed into law by Gov. Kathy Hochul.
The first step? Making it out of the Senate Environmental Conservation committee.
But the bill has fierce opponents within the 11-member committee – including the committee chair, Democrat Todd Kaminsky – who could potentially stop the bill in its tracks.
Kaminsky, a committed environmentalist, authored New York’s Climate Leadership and Community Protection Act (CLCPA) – a landmark 2019 law that mandated that the state get to 100% zero-emission electricity by 2040.
The goals laid out by the CLCPA have been cited by many of the bill’s proponents – who see energy-intensive proof-of-work crypto mining as a threat to the state’s ambitious climate goals – as the driving force behind the proposed moratorium.
Kaminsky, however, doesn’t see things that way.
“I really believe in a new green economy and fighting climate change,” Kaminsky told CoinDesk. “The question we have to ask is, ‘How much will this law go toward helping us reach our climate goals versus harming a nascent industry that I feel is going to be increasingly critical to our state’s economy?’”
“I’d like to do everything we can to make crypto mining more eco-friendly, and there’s great innovators doing that now,” Kaminsky added. “But I think this will be seen as extremely hostile … I think it’s going to lead to really deleterious economic consequences for New York if people perceive it as being hostile to crypto.”
The potential economic impact of a moratorium has been a sticking point for other lawmakers as well, including Assemblyman Clyde Vanel, a Democrat from Queens, and Senator Jeremy Cooney, a Democrat from Rochester.
Vanel and Cooney spoke out against the bill at a rally in Albany on Monday hosted by the Blockchain Association.
Alongside representatives from the crypto industry and trade unions – including the International Brotherhood of Electrical Workers (IBEW), whose opposition hobbled last year’s version of the bill – the lawmakers expressed their concerns that a moratorium would result in a loss of jobs and economic opportunities for underserved communities in upstate New York.
Rochester, which is one of the poorest cities in the U.S., could be particularly vulnerable to the impact of the moratorium. Representatives for Foundry, a crypto mining company headquartered in Rochester, also showed up to protest the bill on Monday. (Foundry is a subsidiary of Digital Currency Group, the parent company of CoinDesk.)
Foundry has said that a moratorium could “take New York out of the game” for crypto mining and slow the company’s plans for expansion – including the addition of new, high-paying tech jobs.
Vanel told CoinDesk the loss of these jobs is a big concern for him and other lawmakers.
“I myself was skeptical that crypto mining could bring quality jobs until I went to see these places for myself,” Vanel told CoinDesk. “But then I saw people without advanced degrees doing advanced degree jobs.”
“There’s all this economic activity,” Vanel added. “We should make sure we work with the industry to create change if we don’t want to push the industry out of New York to other states.”
Republican Senator Anthony Palumbo, a longtime member of the Environmental Conservation Committee, told CoinDesk he wants the state legislature to find a way to strike the correct balance between environmental protection and economic opportunity.
“I don’t think a moratorium is the right answer,” Palumbo said.
“I am definitely an environmentalist, and I get that we do need to reduce our carbon footprint and maybe transition to renewables, but it still needs to be done smartly and reliably,” he added.
Many in the crypto industry – as well as a growing number of lawmakers – have pushed back against the bill for being “bad policy” that unfairly targets the crypto industry.
“When any industry is perceived as being singled out, it’s a problem,” Kaminsky told CoinDesk. “And you have to have a really good justification for it.”
“It’s just a weird universe where we’re telling a crypto miner that they can’t be crypto mining, but some rubber plant down the road can be burning things without any similar moratorium,” he said.
Instead, Kaminsky told CoinDesk he wants to create change and transition the entire economy to more climate-friendly alternatives without singling out any one industry.
“I do want the industry to move off fossil fuels,” Kaminsky said. “The question is, can we do that with them as opposed to doing it to them?”
To advance, the bill has to be considered and passed by the Senate Environmental Conservation committee.
However, it remains unclear when – or if – that will happen.
The committee only has one more meeting this legislative session, the agenda for which will be published on Thursday.
UPDATE (May 5, 2022, 21:11 UTC): Links to Senate and Assembly versions of the bill.
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