Regulation
Sen. Bryan King hopes to bring up stricter crypto mining regulations in upcoming special session
Brian ChilsonSen. Bryan King (R-Green Forest)
Senator Bryan King (R-Green Forrest) said today that he will again propose stricter regulations on crypto mining when the Legislature meets in a special session soon.
King said he alerted Senate President Pro Tem Bart Hester And House Speaker Matthew Shepherd of his projects. He emphasized recent news that the federal government stepped in to shut down a crypto mining company in Wyoming that has ties to China, one reason the issue deserves another hearing as soon as possible.
King’s proposals for strict regulation of crypto mining below during the legislative budget session that ended earlier this month. The legislature instead passed another pair of bills aimed at addressing the various nuisances and concerns surrounding crypto mining, which have now been signed into law by the governor. However, King argued that the bills had major flaws and were largely bogus efforts to quell controversy around crypto mining while remaining too industry-friendly.
King has an opportunity to try again given that a special session will likely be called next month. Due to a combination of legislative incompetence and shenanigansa hubbub around a proposed increase in Game and Fish Commission The director’s salary led to the failure to pass a budget for the commission. This puts the entire agency in limbo for the new fiscal year, beginning July 1, so the Legislature will almost certainly convene for a special session called by the governor to pass this budget. The special session will likely cost taxpayers about $100,000.
Republican legislative leaders have already suggested that they would like to take the opportunity to pass even more tax cuts, heavily targeted at the rich. Governor Sarah Huckabee Sanders will almost certainly favor this idea, but she will just as surely not like the idea of repeating King’s proposals.
If the issue of cryptocurrency mining is not on the agenda when the governor calls a special session, it would require two-thirds approval in both houses of the Legislature to even consider King’s proposals. It was the same obstacle King faced during the fiscal session. During a fiscal session, non-budget proposals also require two-thirds approval in the House and Senate. King’s list of six proposals gained the necessary approval in the Senate, but failed to make it through the House. Most House Democrats refused to vote to consider King’s proposals. for reasons that seem fragile. They proved to be the decisive obstacle that prevented several resolutions from being heard.
Crypto “mining” is the process by which Bitcoin confirms transactions and creates new Bitcoins, using a network of high-powered computers. Unfortunately, this very lucrative industry is noisy and harmful to the environment. Cryptocurrency mines have often proven to be a major problem for the rural communities where they have emerged.
Critics have also raised concerns about whether the mines could pose a threat to national security due to crypto mining companies with ties to China.
Law 851 of 2023which would have been written largely by the Satoshi Group – a dark money crypto advocacy group – has significantly reduced the ability of Arkansas cities and counties to regulate the industry, giving crypto companies a leg up on communities affected by nuisance they cause. It caused an outcry, sparked local and national media reports and sparked a deluge of constituent complaints to lawmakers in affected – usually rural – areas.
The co-sponsors of Law 851, Senator Joshua Bryant (R-Rogers) and Representative Rick McClure (R-Malvern), were also co-sponsors of the new bills that eventually became law, which only increased the fears of critics like King that their main fears would not be addressed and that the new laws were like lipstick on a pig.
“I don’t let the same man take me snipe hunting twice.” Representative Josh Miller (R-Heber Springs) commented during a committee hearing, when asked why he didn’t trust Bryant and McClure to fix the problem they caused.
The new laws essentially restore local control over regulation and establish a new national regulatory and licensing system for cryptocurrency mines. This is almost certainly an improvement over Law 851, and better than nothing. (And for those interested in national security, they impose limits on foreign ownership for designated countries like China.)
But they still have some holes and open questions, and do not go as far as King’s proposals would have done. The fact that the cryptocurrency mining industry is publicly applauding the measures is another red flag for critics.
At the same time, the New York Times reports that the federal government appears to have real concerns about crypto mines with ties to China:
President Biden on Monday ordered a Chinese company to close and sell the Wyoming cryptocurrency mine it built a mile from an Air Force base that controls missiles intercontinental ballistic missiles with nuclear weapons.
The cryptomining facility, which operates high-powered computers in a data center near the FE Warren Base in Cheyenne, “poses a risk to the national security of the United States,” the president said in a statement. decreebecause its equipment could be used for surveillance and espionage purposes.
“The vast majority of machines that power cryptomining operations in the United States are made by Chinese companies,” the Times reports, a point that will likely be raised by King, who had targeted such equipment in his proposals.
King’s resolutions would also have imposed fees on cryptocurrency mines for overusing electricity, with a fee schedule based on megawatts exceeding certain thresholds. The crypto lobby claims this would shut down crypto mining operations, which seems telling in itself.
King’s proposals included various other stricter regulations, such as fully repealing Act 851, restoring local control for counties and cities to regulate crypto mining without limitations (including noise ordinances ), banning ownership by certain foreign nationals (again, China is clearly the primary target), fleshing out regulatory requirements for new or existing crypto mines operating in the state, requiring companies to file a six months’ notice before purchasing or leasing land for a crypto mine, monitoring water consumption and allowing the state to take action against a mine if critical groundwater supplies have been threatened, and more .
Expect a similar set of proposals from King when the special session convenes.
“I will work to pass real legislation to protect Arkansans,” King said in a tweet. “During the last session, professional crypto industry sponsors failed to answer simple and straightforward questions. Other lawmakers also failed to be factual.”
Here are more excerpts from the Times report, released Monday:
Chinese-owned cryptocurrency mines have boomed in the United States since the facilities were effectively banned in China in 2021. Although some cryptomining activities have since restarted in China, Chinese crypto entrepreneurs are attracted to United States for its relatively cheap electricity and well-developed legal system. system.
The Times found Chinese-owned or operated Bitcoin mines in at least 12 states, including Arkansas, Ohio, Oklahoma, Tennessee, Texas and Wyoming, which together consume as much energy as 1.5 million homes. Some are owned by people or companies with ties to the Chinese government or the Communist Party. Until recently, the main supplier of mining equipment operated from an office in a Communist Party facility on Hainan Island, the Times found.