In a move prompted by environmental concerns over the energy-intensive activity, New York Gov. Kathy Hochul signed a law temporarily restricting cryptocurrency mining, making New York the first state to enact a temporary ban on new cryptocurrency mining permits at fossil fuel plants.
The two-year moratorium on new permits that Gov. Kathy Hochul instated on Tuesday will create the first-in-the-nation temporary pause as the state works to balance its economic development and climate goals.
Although the ban comes in light of the cryptocurrency exchange FTX’s collapse, which has led to growing scrutiny of the industry, New York’s state legislature passed the measure in June.
The controversial measure takes aim at the environmental impact of the process used in the transaction of digital money in the fossil fuel plants used for cryptocurrency mining that utilizes proof-of-work authentication.
The Climate Leadership and Community Protection Act that Gov. Hochul signed suggests its use makes achieving New York’s climate goals more difficult since the technology used for Bitcoin and other cryptocurrencies, requires large amounts of energy.
It also mandates New York’s Department of Environmental Conservation to probe the impacts on the environment by the cryptocurrency mining industry operations that use the authentication method and on the state’s efforts to reduce its greenhouse gas emissions.
New York’s legislation is the latest blow for the cryptocurrency industry, which was unable to overcome a successful push by left-leaning lawmakers and environmental activists’ coalition despite its fierce $1.5 million-worth lobbying against the bill.
Gov. Hochul was immediately ripped for signing the ban into law by business groups and the cryptocurrency trade association Digital Chamber of Commerce, which stressed that this law is a dangerous precedent to set in determining who may or may not use power, adding that, to date, no other industry in New York has been sidelined like this for its energy usage.