Earlier this year, the cryptocurrency industry was riding the highest of tides. A guy named Sam Bankman-Fried was suddenly showering Lt. Governor Antonio Delgado with millions, while a crypto mining company in upstate was donating tens of thousands to Gov. Kathy Hochul’s re-election bid. And, of course, New York City’s mayor was acting as an unpaid (but not without some benefits) shill for the industry. At the same time, upstate towns were fighting against one of the worst externalities of the crypto mining industry—energy-intensive Bitcoin mining using once-decommissioned fossil-fuel plants to power the solving of complicated algorithms (which apparently, is what is used to “mine” more bitcoins). Truly, it was a sorry and idiotic state of affairs during a climate emergency where the state had already committed to drastically reducing its carbon emissions within the next few years.
Even at the end of this spring’s legislative session, it looked unlikely that any action would be taken to stop the practice of firing up these old polluting plants for Bitcoin mining. The industry was simply too strong, and had bought off those whose support was needed to pass a bill that would impose a two-year moratorium on new permits, and order the Department of Environmental Conservation to do a study on the impacts of crypto mining.
State Senator Todd Kaminsky, from Long Island, who chaired the Environmental Committee, told the Pulitzer-worthy publication (no, really) CoinDesk in May, that “The question we have to ask is, ‘How much will this law go toward helping us reach our climate goals versus harming a nascent industry that I feel is going to be increasingly critical to our state’s economy?’”
But incredibly, amidst the wreckage of other climate-related bills, the crypto mining bill passed the legislature at the very last second. And now its fate was in the hands of a Governor whose own re-election campaign was being funded in part by the groups pushing for the bill’s veto.
The crypto industry took the bill, whose impact would be limited to just a few proposed operations, as an existential threat.
“"Now is not the time to cede New York's position as the financial capital of the world," Kristin Smith of the Blockchain Association, said after the bill came out.
Over the summer and into the fall, Hochul remained non-committal on signing the bill or vetoing it.
Well, a lot can change in just a few months. Sam Bankman-Fried’s crypto empire is in tatters, amidst a larger crash in the cryptocurrency industry. One of the two largest cryptocurrencies, Ethereum, changed its “proof-of-work” (we won’t explain, you don’t need to know) procedure to no longer need energy-intensive mining, and Hochul’s own DEC began rejecting permits for new crypto-mining plants using fossil-fuels, saying it violated the state’s climate law. Perhaps most importantly, Hochul won re-election, and an industry on its back foot doesn’t really have much sway without an election looming. Todd Kaminsky resigned.
On Tuesday night, Hochul signed the moratorium into law, the first-in-the-nation statewide ban on new crypto mining projects. In a memo explaining her support, Hochul wrote that “While it’s possible the prospect of new mining plants were already a dead letter, it still sends a message about New York’s posture regarding its own climate laws and obligations—that if a polluting lobbying group is weak enough, and environmental activists don’t relent, the climate will win out.”
But take heart Blockchain bros, there’s still one Crypto-booster who won’t give up on this ailing industry:
City Hall did not return a request for comment.
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