New York Gov. Kathy Hochul gestures speaks to supporters during an election night event at in New York City on November 8, 2022. (Photo: Timothy Clary/AFP via Getty Images)

'Leading the Nation on Climate,' NY Governor Signs Partial Ban on Crypto Mining

"This first-in-the-nation law should set the standard for every other state where crypto miners are coming in, extracting resources, and wreaking havoc," said one campaigner. "Thank you, Gov. Hochul, for setting a precedent for the rest of the country."

Environmentalists celebrated after Democratic New York Gov. Kathy Hochul on Tuesday approved a two-year moratorium on permits for fossil fuel plants that power cryptocurrency mining operations which use proof-of-work authentication methods to validate blockchain transactions.

While the cryptocurrency industry and its allies opposed the measure--the Digital Chamber of Commerce said it was "severely disappointed" with Hochul's decision to sign the bill into law and set a "dangerous precedent" for energy rules--environmental campaigners heralded it as a model.

"This first-in-the-nation law should set the standard for every other state where crypto miners are coming in, extracting resources, and wreaking havoc," said Liz Moran, Earthjustice's New York policy advocate, in a statement. "Thank you, Gov. Hochul, for setting a precedent for the rest of the country and staying true to New York's climate law mandates."

After also thanking the bill sponsors, Assembly Member Anna Kelles (D-125) and Sen. Kevin Parker (D-21), "and all of the advocates who were critical to this effort," Moran noted that the law requires a study by the New York State Department of Environmental Conservation (DEC).

"We're very much looking forward to the DEC's fact-finding review, which we're confident will affirm what Earthjustice and the White House have already concluded: crypto mining is a major threat to climate security and needs to be closely regulated," she said.

In September, Earthjustice and the Sierra Club released a report titled,The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now.

That same month, the White House Office of Science and Technology Policy put out a fact sheet highlighting that "depending on the energy intensity of the technology and the sources of electricity used, the rapid growth of crypto-assets could potentially hinder broader efforts to achieve U.S. climate commitments to reach net-zero carbon pollution."

Given the industry's impacts, Moran was far from alone in applauding Hochul's move.

The Divest NY coalition declared that "New York is once again leading the nation on climate."

"We did it!!!" Kelles said in a series of tweets, thanking the governor as well as fellow legislators who backed the bill, which passed the state Assembly in April and the Senate in June "despite enormous pressure from the crypto industry to stop it."

"This is a huge win for our planet and a sign that New York is not afraid to lead the nation in our climate policy," Kelles continued--adding that "I am just filled with so much hope for our planet because of my partners in this fight," whom she called "climate warriors."

In a memorandum Tuesday, Hochul pointed out that "the legislation would still allow the issuance of permits for eclectic energy facilities that use alternatives to carbon-based fuel, such as hydropower, which would permit growth and business development in this industry."

The Democrat's decision to endorse the bill came after she was noncommittal during a debate leading up to her reelection earlier this month and as the crypto industry faces heightened scrutiny.

As The New York Timesreported Tuesday:

Earlier this month, the crypto exchange known as FTX suffered a swift and public collapse that led to its declaration of bankruptcy. The fall of what had been a trusted player in the new market has led to broader questions about the future of the exchange, as well as possible criminal charges for its principal, Sam Bankman-Fried.

Mr. Bankman-Fried had been in the process of lobbying New York regulators to permit his exchange to operate in the state. He is also a major Democratic donor who backed a super PAC that spent $1 million to boost Ms. Hochul's running mate, Antonio Delgado, in his primary race earlier this year.

The spending drew accusations from Ms. Hochul's political opponents, who argued it was a signal that the industry was trying to exert its influence to pressure the governor into vetoing the mining moratorium.

In a Tuesday opinion piece for The Wall Street Journal, U.S. Sen. Elizabeth Warren (D-Mass.) wrote that "FTX's implosion should be a wake-up call" and if the federal government does not adequately regulate the crypto industry, it will "take down the economy."

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