The Future of NY’s Crypto Industry is in Gov Hochul’s Hands

The future of cryptocurrency in New York lies in Gov. Kathy Hochul’s hands after lawmakers passed two potentially conflicting bills on Friday, June 3, 2022. This week we’ve teamed up with locally grown Foundry Digital to tackle this pressing topic and the potential impact on WNY.

Technology Industry leaders are calling this week for the advancement of a bill sponsored by Assemblyman Clyde Vanel and co-sponsored by WNY representative Assemblymember Crystal Peoples-Stokes. The bill A.9275 / S.8343 (Vanel / Sanders) establishes the New York State cryptocurrency and blockchain task force to study how New Yorkers can harness the growth of the industry for the advancement of New York, including its environmental, social, and economic implications. The bill echoes the policies of the Biden Administration, California, and Washington State in seeking to study the promising cryptocurrency sector to determine its benefits and impacts.

If signed into law by Gov. Hochul, the task force would consist of sixteen members, with a mix of core state regulators, academics, environmentalists, and industry participants. Importantly, the task force must submit to the governor, by December 15, 2024, a report on various topics regarding the digital assets industry, including jobs, tax revenue, transparency, and energy usage. Assemblyman Clyde Vanel states,

The task force will help us report on major issues, including financial inclusion for underrepresented communities; business opportunities for women and minorities; jobs and skill training across New York state, including upstate. It will include the use of technology to protect our data and our critical infrastructure… and ways to reduce the environmental impact of this early but crucial technology.

The second bill, A.7389C / S. 6486D (Kelles / Parker) would impose a 2-year ban on cryptocurrency mining operations that use proof-of-work authentication methods to validate transactions and, more importantly, to secure the online investments of the 46 million Americans who use the network. The cause for concern comes after the Greenidge Generation Bitcoin mining facility renovated a natural gas plant near Seneca Lake in Dresden, New York. There is fear downstate of more facilities following suit, although the moratorium bill grandfathers in the Greenidge facility, thus contradicting its original goal. Assemblymember Anna Kelles, who drafted this legislation, believes that future converted facilities could pose a serious threat to the environment, even though the majority of cryptominers in New York operate at 70% carbon neutrality.

Contrary to claims, many within the industry strongly support the environmental goals New York State is advancing, including transitioning to a greener economy. Although the State has set out on a deliberate process to ensure that these green changes can occur without adversely affecting the economy and population, this bill skips the deliberation and implements a blunt suspensionon a specific sector without much research to back it up.

According to Block, Inc. which includes Square, Cash App, Afterpay, Spiral, TIDAL, and TBD, “There’s a misconception that as bitcoin transactions scale, so will its energy consumption. In reality, bitcoin’s transaction volume can be independent of energy usage, meaning that it can accommodate 100, 1,000, or 10,000 times more transactions for the same amount of energy. For example, Cash App users can send bitcoin back and forth to each other thousands of times and there is no impact on bitcoin mining energy consumption. ”

Many fear that if the two year digital mining ban bill is enacted the resulting effect would be detrimental to local small businesses, future entrepreneurs ‘career opportunities, and specific communities’ ability to save and store wealth. For example, the Harlem Bitcoin Community has hundreds of members from many different backgrounds, most of whom live in New York City. They state,

A recent University of Chicago survey reported that 44% of those who own cryptocurrency are people of color. Additionally, 30% of Black American investors own some form of cryptocurrency. This is important. Hindering bitcoin hinders us.

As we pursue a greener economy, we must also promote new technologies and industries that advance our state forward. The best way to accomplish both goals is to first engage in a holistic review of the issues and set policy when the facts are known and established.

While regulators and communities have raised valid concerns about Bitcoin’s electricity consumption, the mining industry is a significant contributor of jobs — including in economically underserved areas and actually consumes less energy than many comparable industries.

Market participants, service providers, and industry working groups are actively working to make the industry greener and more transparent. In addition to the State’s already highly onerous and regressive set of regulations (the “Bit License”).

Although it’s widely acknowledged that there are deep issues surrounding the crypto industry, the world is not backing away from trying to understand this emerging technology. In addition, if passed, the impact of bill A.7389C / S. 6486D could be far-reaching and set a dangerous legal precedent of banning new industries in New York without proper research and investigation.

If you are interested in seeing the New York State cryptocurrency and blockchain study task force (A.9275 / S.8343) have the opportunity to study the impacts of the industry, including environmental and economic impacts, you can click here to e-mail or call Gov. Hochul’s office.

Foundry was created to meet the institutional demand for better capital access, efficiency, and transparency in the digital currency mining and staking industry. As a Digital Currency Group company, Foundry taps unparalleled institutional expertise, capital, and market intelligence to provide North American bitcoin miners and global manufacturers with the resources to build, maintain, and secure decentralized networks. Foundry empowers miners with the tools they need to build tomorrow’s decentralized infrastructure. We are protocol-agnostic and seek to support like-minded blockchain entrepreneurs who share our mission to advance the industry.

Lead Image: June 10, 2022 – Albany, NY – Governor Kathy Hochul speaks during a media availability in the Red Room at the State Capitol in Albany. (Mike Groll / Office of Governor Kathy Hochul)

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