Regulation
New Arkansas Laws Regulate Cryptocurrency Mining
Governor Sarah Huckabee Sanders signed two laws regulating cryptocurrency mining in Arkansas, after months of outcry from lawmakers and their constituents.
Much of the pressure for mining regulations came from a woman named Gladys Anderson. She lives next to a crypto mine in Bono, a neighborhood near Greenbrier. It is a rural farming community, where residents say they woke up one day to hearing constant screams and buzzing coming from the mine.
Anderson lives closest, just a few hundred yards away. His story has since gone national; Speaking on CBS Newsshe called the noise “torture.”
Criticisms of these machines, which generate cryptocurrencies like Bitcoin, fall into three categories: they are too noisy, they are bad for the environment and they have foreign ownership links that make many people uncomfortable comfortable.
The Arkansas Legislature’s fiscal session, which officially adjourned last Thursday, was designed by law to focus only on budget matters. But this year, lawmakers made an exception for this one issue.
One of the bills was championed by Sen. Joshua Bryant, R-Rogers, who explained his support for the legislation this way.
“Once they are operational and operating in accordance with existing ordinances/laws, they are not just banned arbitrarily or capriciously,” he said.
During the 2023 legislative session, Bryant sponsored a bill that later became Law 851. The law almost entirely deregulated mining, prohibiting local governments from imposing restrictions on them. Since then, there has been an influx of crypto mines in Arkansas and, with them, controversy over noise and operations. Bryant says he doesn’t want to repeal that law.
“Repeal really wasn’t an option. The option was to create a state framework as we did with automobile racing in the 90s, with automobile and gasoline compressors in the 2000s, to have some state supervision over this industry in order to to control it when the counties do not want to. step up and do it themselves,” he said.
Bryant says he simply wants to give counties the authority to regulate mining, as well as the state if counties choose not to. He says he has met with leaders in the crypto industry and does not believe the practice is inherently wrong. He wants to crack down on “one or two bad actors”.
“[If] they would have complied or been better neighbors a year ago, it wouldn’t have been much of a conversation,” he said. “Because crypto mines have been operating in our state for over a decade.”
The first new law allows mines to operate if they comply with noise ordinances. They must be within 2,000 feet of a residence and cannot be controlled by a “business controlled by a prohibited foreign party.” The second new law subjects mines that break the rules to civil penalties.
One of the few lawmakers to vote against the bills was Rep. Andrew Collins, D-Little Rock. He doesn’t like the part of the bill that prohibits foreign ownership of mines. There is evidence linking crypto mining in general to the Chinese government.
Collins says it could be a slippery slope.
“We have to be very careful when we say that someone cannot do something, or does not have the right to own property or exercise the right to earn a living based on their membership in a category” , did he declare.
Collins asked Bryant, who sponsored one of the bills, about it during a committee meeting.
“In fact, if you have someone from Venezuela, let’s say, and they try to move to America and they try to become a citizen and they operate within the confines of the law, they are completely innocent , No problem. They are not allowed to make an investment.
Bryant did not share his concerns.
“If you come here and you open a facility here that uses our natural resources, that presents potential cybersecurity threats to our network and other entities, and you are connected to said network, where do your loyalties lie and what will be asked -they ? You?”
Collins said he wants to see better evidence than he heard in Byrant’s response. He also says the laws don’t actually address one of the most important problems; they do not reduce noise.
“[The] the only thing a crypto mine operator needs to do is apply noise reduction techniques,” Collins said. “They can be very inefficient.”
One of the laws lists examples of things like liquid cooling that could be used to keep mines quiet. But that doesn’t force the mine owners to turn down the sound. Bryant says he applies an industry standard.
“Many of my colleagues didn’t want the government to control the noise,” he said. “Some people thought that if you live in a county and the county doesn’t want to pass ordinances requiring the community as a whole to abate its noise, why are we telling a company to do something that we’re not saying? not for everyone to do?
Gladys Anderson, who lives next to the Bono cryptocurrency mine, said she doesn’t trust what Bryant says about the law. But she says she’s trying to stay positive about it.
Faulkner County passed an ordinance capping noise at 60 decibels, a level that Anderson and Little Rock Public Radio measured beyond the mines. She joins other residents in her community in filing a lawsuit over the noise. Bryant says because of the new laws, she now has options.
“They have 90 days to comply. I think this will solve the problem. Otherwise, the state will have jurisdiction once the rules are promulgated, or the community of surrounding neighbors can go to court to ensure they are following one of these noise abatement procedures.
An attorney representing the owners of the Bono cryptocurrency mine did not respond to Little Rock Public Radio’s request for comment.