New York Governor Signs Law Partially Restricting Crypto Mining

New York is taking the first step in the nation to put the brakes on the spread of cryptocurrency mining, under a law Governor Kathy Hochul signed Tuesday.

The measure comes amid growing scrutiny of the cryptocurrency industry following this month’s collapse of the FTX exchange. But the New York measure, which passed the state legislature in June, is particularly concerned with the environmental aspects of crypto.

“I will ensure that New York continues to be a hub for financial innovation, while also taking important steps to prioritize the protection of our environment,” Hochul, a Democrat, said in a letter announcing his endorsement.

The new law imposes a two-year moratorium on new and renewed wind permits for fossil-fuel power plants used to power large “proof-of-work” cryptocurrency mining — the name for the accounting process that records and secures transactions in bitcoin and the like. forms of digital currency. Proof of work is a blockchain-based algorithm used by bitcoin and other cryptocurrencies.

The law also requires the Department of Environmental Conservation to assess how cryptomining affects the state’s ability to meet its climate goals.

Environmentalists said New York is undermining those principles by allowing cryptomining operations to run their own natural gas-fired power plants.

Cryptocurrency advocates, on the other hand, say that this move will cripple the economic development of New York, and they choose crypto while not talking about other uses of fuel.

Cryptocurrency mining requires special computers that consume a lot of power. One study found that as of November 2018, the annual electricity consumption of bitcoin was comparable to that of Hong Kong in 2019, according to the US Energy Information Administration.

Some miners are looking for ways to reduce their reliance on fossil fuels to generate the electricity they need.