Fight looms over New York’s bid to slow crypto mining boom

Written by Luis Ferré-Sadurní, Grace Ashford, Dana Rubinstein and David Yaffe-Bellany

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

In New York, lawmakers have moved in a different direction: In the waning hours of its 2022 session, the state Legislature last week unexpectedly passed a bill that would impose a two-year ban on new cryptocurrency mining permits, specifically at fossil-fuel burning plants, which some businesses have repurposed to power the energy-intensive activity.

The passage of the bill marked a significant defeat for a burgeoning, deep-pocketed industry.

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It is not clear, however, whether Gov. Kathy Hochul will sign the bill. And the cryptocurrency industry is expected to invest heavily in efforts to persuade her to reject the measure.

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

A far larger political gift has gone to Hochul’s lieutenant governor, Antonio Delgado, who is facing two primary challengers this month. A super PAC, backed by the founder of FTX, a major cryptocurrency exchange, has spent roughly $1 million on digital ads in the last few weeks in support of his campaign, according to state filings.

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

The governor, a moderate Democrat facing a primary election on June 28, has been noncommittal on whether she would sign the bill, a priority of environmental activists and the party’s left flank. Hochul likely won’t have to make a decision until Dec. 31.

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

This article originally appeared in The New York Times.


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