A fight looms over New York’s attempt to slow the crypto-mining boom

Written by Louis Ferre-Sadurnay, Grace Ashford, Dana Rubinstein and David Yaffe Bellani

Across the country, some states are trying to entice crypto-mining companies to set up shop, offering tax incentives in hopes of creating jobs and expanding their foothold in the tech industry.

In New York, lawmakers moved in a different direction: In the closing hours of its 2022 session, the state legislature last week unexpectedly passed a bill that would impose a two-year ban on new mining permits for cryptocurrency, specifically when burning fossil fuels. Factories, which some companies reused to power the energy-intensive activity.

Passing the bill represents a major defeat for a thriving industry with deep pockets.

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However, it is not clear if Governor Kathy Hochhol will sign the law. The cryptocurrency industry is expected to invest heavily in efforts to persuade it to reject the measure.

Hochul’s campaign has already received $40,000 from Ashton Sonnett, CEO of Coinmint, which has a digital mining operation on the grounds of a former aluminum plant in Massena, northeast of Niagara Falls.

A much larger political gift has gone to Hochul’s deputy governor, Antonio Delgado, who faces key rivals this month. Super PAC, backed by the founder of FTX, a major cryptocurrency exchange, has spent nearly $1 million on digital advertising in the past few weeks to support his campaign, according to state filings.

The company is also paying $12,000 per month to a consulting firm, Hinman Straub, to lobby the state government over cryptocurrency regulations, according to state records.

The governor, a moderate Democrat facing a primary on June 28, was noncommittal on whether to sign the bill, a priority for environmental activists and the party’s left wing. Hochul likely won’t have to make a decision until December 31.

With the growth of the value of cryptocurrencies, bitcoin mining has become a major industry. Powerful computers connect to the Bitcoin network and perform complex mathematical tasks to confirm the legitimacy of transactions. As a reward for this service, digital miners receive new bitcoins, providing a financial incentive to keep computers running.

This article originally appeared in the New York Times.


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