MASSENA — Gov. Kathleen C. Hochul has signed into law a limited two-year moratorium on cryptocurrency mining operations in the state.
But, for the town of Massena, it won’t have an impact on plans to draw up a local law and continue to extend the moratorium until Jan. 31.
“I think my recommendation to the board is just keep moving forward with our own local law,” town attorney Eric J. Gustafson said.
The state moratorium applies to new permits for cryptocurrency mining companies that are powered by fossil fuels and use proof-of-work authentication methods to validate transaction data. The Bitcoin network relies on proof-of-work authentication.
Mr. Gustafson said proof-of-work authentication is the process for securing the block chain.
“It’s the process that does the encryption,” he said.
Under the new bill, the Department of Environmental Conservation will also be required to study the environmental impacts of the crypto industry.
Although the bill was approved by the state Senate in June, Gov. Hochul didn’t sign it until after the November election.
“It was forwarded to her some time ago,” Mr. Gustafson said.
New York is the first state to impose such a ban.
“I will ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of the environment,” Hochul said in a memo. “It is the first of its kind in the country and a key step for New York as we work to address the global climate crisis.”
“This is a common-sense bill that’s about protecting our communities and the air they breathe. For too long the state’s dramatically energy-intensive mining facilities, whose massive carbon footprints exacerbate climate change, have had little oversight. Not only does crypto take a toll on the environment, but communities in upstate New York could suffer as once-abandoned coal power plants come back from the dead as ‘zombie plants’ that mine crypto all day, every day,” Richard Schrader, the New York legislative and policy director for the Natural Resources Defense Council, said in a statement.
“Our state has taken concrete steps to address the climate crisis since the 2019 Climate Leadership and Community Protection Act — and crypto should not be allowed to undercut those wins. By signing this bill, Governor Hochul is doubling down on her commitment to New York State’s climate goals,” he said.
The Massena Town Council extended its moratorium until Jan. 31 during its November meeting, although resident David Fenton said they should skip the moratorium and ban the operations completely until state regulations are in place.
He said that, without regulations, there is no protection for investors if a company went bankrupt, “and I think that in itself it’s a major problem. You’re taking the risk where right now there’s no government regulations. You’re perpetuating an industry that doesn’t have any protection. They can go bankrupt very easily. You’re supporting that. I do not think it’s a very good idea.”
During the meeting, Mr. Gustafson said they were getting close to having local regulations in hand.
“I think we’re just about there. We’ve got some work to do. They’re waiting for a draft of cryptocurrency mining operations from me. I have a draft that I think is almost ready for their consideration. I’m just not quite ready, but we’re close. I think the January time frame will give us enough time to finalize the regulations, have the committee review it, and then have it out for public hearing sometime in December or January so that it can be adopted,” he said.