Time is running out for newly elected New York Governor Kathy Hochul to sign a statewide moratorium on particularly polluting methods of cryptocurrency mining. Hochul managed to sidestep the controversial bill while on the campaign trail. Now, her decision to sign or veto the bill could determine whether crypto miners flee the state or stay and potentially derail its climate goals.
State legislators passed a bill in June that establishes a two-year moratorium on new permits for fossil fuel power plants seeking to mine energy-hungry cryptocurrencies. The bill also requires the state to complete an environmental impact study on crypto mining in the state. Hochul has until the end of the calendar year to sign the bill into law. Missing that deadline amounts to a pocket veto, forcing state lawmakers to pass similar legislation again next year if they’re still concerned about how much energy crypto mining consumes. Hochul has yet to commit publicly to signing the bill. Her office didn’t immediately respond to an inquiry from The Verge.
Her decision to sign or veto the bill could determine whether crypto miners flee the state or stay and potentially derail its climate goals
The US quickly became the world’s biggest hub for Bitcoin miners after China cracked down on their operations in 2021. Many of them set up shop in New York, chasing cheap electricity to power their mining rigs. While many other cryptocurrencies — notably Ethereum — have turned to far less polluting mechanisms to generate new tokens and verify transactions on their blockchains, Bitcoin remains tremendously energy-hungry. The Bitcoin network is estimated to use nearly as much electricity in a year as the country of Pakistan.
Miners burn through so much electricity because they use specialized hardware to earn new tokens. They use the hardware to solve computational puzzles for a chance to add blocks to the blockchain ledger. If the hardware runs on fossil fuels, they’ll create a lot of pollution in the process. They’ve even managed to breathe new life into struggling fossil fuel plants. In New York state, an embattled gas plant called Greenidge has essentially remade itself into a crypto mine. And crypto mining company Digihost has plans to take over another gas plant near Buffalo, New York.
New York’s Department of Environmental Conservation denied the Greenidge gas plant an air permit back in June, determining that its operations “would be inconsistent with the statewide greenhouse gas emission limits established in the Climate Act.” New York’s Climate Act, passed in 2019, sets the state on a path to slash its greenhouse gas emissions by at least 85 percent by 2050.
Worried that operations like Greenidge imperil that goal, residents and environmental groups successfully pushed state legislators to pass the crypto mining moratorium this year. Greenidge, however, is already grandfathered in and continues to operate while it appeals the denial of its air permit. The hope is that the moratorium will stop similar operations from cropping up — if Hochul signs it into law.
To be sure, many bills are often signed at the end of the year in New York. But Hochul, who succeeded Governor Andrew Cuomo in 2021, faced a surprisingly competitive race against Republican challenger Lee Zeldin this year. Environmental advocates speculate that Hochul may have waited to sign the bill until after the election in part to avoid losing votes from crypto fans. On top of that, Hochul has reportedly received a $40,000 donation from the chief executive of a company that operates a former aluminum plant turned crypto mine and smaller individual donations from members of the crypto industry group Blockchain Association.
During an October 25th gubernatorial debate, Zeldin said that he would not sign the moratorium into law if he were governor. Hochul gave a more measured response, saying, “I’m looking at that bill closely. This has nothing to do with whether or not we embrace the cryptocurrency industry.”
The moratorium is pretty limited in scope, only pausing permits for fossil fuel power plants that would mine crypto through the energy-hungry process that Bitcoin uses. It wouldn’t affect facilities using other sources of energy, like the state’s abundant hydropower. Nor would it affect cryptocurrencies that have turned to less energy-intensive protocols. Still, the crypto industry says the moratorium will scare off business in the Empire State.
“I think you would see a pretty swift exodus”
“Should the governor sign the bill, I think you would see a pretty swift exodus of any miners that aren’t almost solely reliant on renewable energy,” John Olsen, New York state lead for the Blockchain Association, tells The Verge. “It’s a difficult time for the industry. New York probably wouldn’t be worth it if it doesn’t have some kind of strong signal to the industry that it’s welcome here ... That starts with a veto of that bill,” Olsen says. Blockchain Association has spent some $225,000 on lobbying in Albany this year.
On the other side of the argument, Hochul will continue to feel the heat from environmental advocates — including those who supported her reelection. “We’re going to get to work pressuring her immediately,” says Alex Beauchamp, Northeast region director at Food & Water Action. The environmental group worked to get out the vote for Hochul ahead of this week’s election and now plans to rally outside her office next week to push the governor to sign the moratorium.
“[The Hochul administration] need[s] to give the base that just elected her something real — and for sure one the easiest things could be to sign the crypto mining moratorium,” Beauchamp says. “I mean, that’s a layup.”