Proposed Cryptocurrency Mining Regulations Clear Arkansas Senate, Head to House • Arkansas Advocate

Two bills that would regulate cryptocurrency mining operations in Arkansas passed the state Senate on Wednesday and will be considered by the House.

Senate Bill 79 adopted with 32 votes in favor and no dissent, while Senate Bill 78 adopted with 26 votes in favor and three votes against. A few senators abstained from voting on one or both bills.

SB78 would impose noise limits on crypto mines, prohibit them from being owned by certain foreign entities, and allow local governments to pass ordinances regulating mines. Sen. Joshua Bryant, R-Rogers, the bill’s sponsor, called it “hopefully an administrative solution” to Law 851 of 2023or the Arkansas Data Center Law.

“I can’t say it’s perfect, but I don’t want perfection to get in the way of good,” he said.

Act 851, also sponsored by Bryant, was introduced and passed during the final week of the 2023 legislative session. The law limited the ability of local governments to regulate crypto miners, which are large groups of computers that harvest digital currency and are often located in rural areas due to the space they take up.

Officials expressed frustration with the speed with which Act 851 was passed by the Legislature and expressed concerns about potential foreign ownership of mines and risks to national security.

There are cryptocurrency mines in DeWitt and the Bono community near Greenbrier, and a foreign entity attempted to start a cryptocurrency mine near Harrison. Sen. Bryan King, R-Green Forest, represents Harrison and has been one of the strongest supporters of cryptocurrency regulation in the Legislature.

King sponsored six resolutions that passed the Senate, but failed in the House over the past two weeks, meaning it was unable to present its own set of crypto regulation proposals during the fiscal session, which focuses on the state budget.

King voted against SB78 and repeatedly said the proposed regulations were not strict enough. He voted for SB79, although he said he had doubts about the bill, which contains much of the same language as SB78 and is sponsored by Sen. Missy Irvin, R-Mountain View.

The resolution that allowed SB79 to be drafted contained language that would have required crypto mines to be licensed by the state Department of Energy and Environment. The bill would give this responsibility to the National Oil and Gas Commission.

Both bills would give “prohibited foreign-controlled enterprise” exactly one year after policies to divest from ownership of an Arkansas crypto mine were enacted.

King asked Bryant why the legislation would give companies so much time to divest. Bryant said the clause was a result of advice from Attorney General Tim Griffin’s office.

Irvin made a similar statement Tuesday before the Senate Municipal, County and Local Affairs Committee before passing an amended version of SB79.

The Bono community is in the Irvin district and local residents have filed a lawsuit over noise pollution from the local crypto mine.

Sen. Bryan King, R-Green Forest (Arkansas Legislature)

Besides King, Democratic Senators Greg Leding of Fayetteville and Stephanie Flowers of Pine Bluff voted against SB78.

Both King and Flowers said the legislature should hold a special session this year to consider more crypto regulations.

“What concerns me … is we’re just going to take a look at the rules and regulations,” King said.

Flowers represents part of Arkansas County, where the crypto mine near DeWitt is located, and she said her constituents told her SB78 was “a bad bill.”

“We don’t know the full extent of these centers,” she said. “…Something doesn’t feel right about this.”

Bryant said he would urge Gov. Sarah Huckabee Sanders to call a special session if SB78 and SB79 become law but do not resolve the public’s issues with crypto mining.

Both bills have emergency clauses and would take effect immediately after Sanders signs them.

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