Crypto becomes a recurring campaign issue for Hochul – The Legislative Gazette

During last week’s gubernatorial debate, Gov. Kathy Hochul was asked about a piece of legislation she has not signed, the Assembly Bill. A7389Csponsored by Anna Kelles, D-Ithaca, and P.6486sponsored by Kevin Parker, D-Brooklyn.

The bill, which would establish a two-year moratorium on proof-of-work cryptomining in New York state and request an environmental study of the industry’s impact, has not been signed since it expired on June 2.

“Proof-of-work” cryptomining is considered more harmful to the environment because it uses extremely large amounts of energy, often derived from coal or natural gas, and pollutes the local air and water supplies.

In response to the question, Hochul said, “I’m looking closely at that bill, this has nothing to do with whether or not we embrace the cryptocurrency industry.” She also referenced the Department of Environmental Conservation’s effective shutdown of Greenridge Generation, a cryptomining facility, after they failed to renew their air permit.

Greenridge Generation, formerly based in Dresden, New York, released total emissions of 514,012 short tons CO2e of greenhouse gases in 2021 following New York State Department of Environmental Conservation. This led to DEC’s permit decision. Before this, environmentalists pushed against the business citing the effect on Seneca Lake water temperatures and the local environment.

Governor Hochul has previously said she has not been able to evaluate the bill and sign it because of the myriad other pieces of legislation she is responsible for. At a primary debate in June, she said, “This bill came up at the very end of the session. We didn’t have an opportunity to get legislative teams to engage with it, figure out issues or say yes or no or [make] any changes that normally occur in the process.”

The Republican candidate for governor, Rep. Lee Zeldin, said he has no interest in signing the bill if elected Nov. 8.I wouldn’t, and we shouldn’t pick winners and losers in business, and you’re seeing it play out right now as far as them raising money, donating money to my opponent trying to curry favor.” In accordance New York State Board of Elections Ashton Soniat, chairman and CEO of Coinmint, a cryptocurrency mining company in Massena, New York, contributed $40,000 to the political action committee, Friends of Kathy Hochul, in May.

Proof-of-work cryptomining uses computers to solve complex mathematical problems to release blocks of cryptocurrency to its operators. This process requires a high level of processing speed from computers which in turn consumes a lot of energy. The industry as a whole uses more energy than any country.

It also produces heat. To cool the computers so that they continue to function properly, water is run along them in pipes to regulate the temperature. The water is then released into sewage systems or into surface water such as lakes or rivers. Greenridge Generation released 140 million gallons of warm water into Seneca Lake while operating.

In September, Kelles and climate justice advocates pushed for Governor Hochul to sign the bill, pointing to proof-of-stake cryptomining as a less harmful option available to cryptominers concerned about the health of the industry.

“Throughout the last legislative session, the blockchain and more specifically the cryptocurrency industry repeatedly argued that this bill for a two-year moratorium on the use of fossil fuel-based power plants, which means it’s very specific and narrow, would kill the cryptocurrency industry here in New York and that industry argument doesn’t hold up water that was proven this past week Ethereum’s successful merger demonstrates that proof-of-work cryptocurrency mining is not necessary for the industry to grow, including here in New York, and crypto, most importantly, can be energy efficient while continuing to grow in New York without using the energy-consuming proof of work method,” said Assemblyman Kelles.

Ethereum, a type of cryptocurrency, switched to the more environmentally friendly proof-of-stake mining process on September 15. Ethereum states that this will reduce the cryptocurrency’s energy consumption by 99.5 percent. This is because proof of effort mining does not rely on computer-based and energy-intensive problem solving. It instead asks miners, now referred to as validators, to verify cryptocurrency transactions and validate block information to release cryptocurrency to itself.

To Kelle’s point about the safety of proof-of-stake, David Banks, program director of Globalization Studies at the University at Albany, said, “New York’s threatened ban appears to have been good enough to probably have saved many communities from some very serious environmental problems .Crypto mining rigs in other states and countries are known to set up shop in old industrial buildings with little to no regulation or upside to society since these things do not source local materials nor create jobs.With proof of stake these environmental concerns are largely sated .”

There are currently more than 20 regulated crypto businesses in New York.

Earthjustice, a nonprofit environmental law organization, issued one comprehensive white paper about environmental and societal concerns facing parts of the country and the state that hosts crypto mining.

“We are very concerned that this industry, given the amount of energy it uses, is not in line with the state’s climate goals. So we’ve been working with a number of partners across the state to urge Governor Hochul to sign this legislation to ensure that we don’t directly run afoul of our climate change law,” said Elizabeth Moran, policy spokesperson for Earthjustice.