New York Imposes Two-Year Moratorium on Crypto Mining Firms

In a bid to address environmental concerns over proof of work (PoW) mining, The New York State Senate has passed a Bill, that imposes a two-year moratorium on new crypto mining firms that use non-renewable power.

The Bill, which was passed by the state Assembly last month, also sought to pause renewals for existing operating permits.

The Senate Bill S6486D, which was sponsored by Senator Kevin Parker, was passed in a 36-27 win and will now be forwarded to Governor Kathy Hochul for ratification.

Bill Provisions

According to the provisions of the Bill, a two-year moratorium will be imposed on operations that use PoW consensus to mine cryptocurrencies. These fossil-fueled mining operations are known to be an energy-guzzling method to verify transactions on the blockchain.

For existing mining operations, the Bill also caps their electrical consumption at their current levels.

The Bill, however, does not alter any operations running on renewable sources. It also does not prevent the use of less energy-intensive alternatives to PoW, such as proof-of-stake (PoS), used by many other cryptocurrencies to verify transactions.

The PoW algorithm underpins the industry’s two biggest cryptocurrencies—Bitcoin BTC/USD and Ethereum ETH/USD, with the latter expected to switch to a PoS consensus mechanism in Q3 this year.

Earlier this year, the European Parliament had proposed a similar PoW mining ban, however, amid public scrutiny, it amended the proposal to remove the ban.