Regulation
New Arkansas Laws Regulate Cryptocurrency Mining
Gov. Sarah Huckabee Sanders has signed two bills regulating cryptocurrency mining in Arkansas, after months of protests from lawmakers and their constituents.
Much of the push for mining regulation comes from a woman named Gladys Anderson. She lives next door to cryptocurrency mine in Bono, a neighborhood near the Greenbrier. It is a rural farming community, where residents say they woke up one day to hear a constant screaming and whirring sound coming from the mine.
Anderson lives closest to it, a few hundred yards away. Since then his story has become national; Speaking of on CBS Newshe called the noise “torture.”
Criticisms of these machines, which generate cryptocurrency such as Bitcoin, fall into three categories; they’re too loud, they’re bad for the environment, and they have foreign ownership ties that make many people uncomfortable.
The Arkansas Legislature’s fiscal session, formally adjourned last Thursday, was designed by law to focus only on budget issues. But this year, lawmakers made an exception for this issue.
One of the bills was supported by Sen. Joshua Bryant, R-Rogers, who explained his support for the legislation that way.
“Once they are active and operating under existing ordinances/laws, they are not simply banned arbitrarily or capriciously,” he said.
In the 2023 legislative session, Bryant sponsored a bill that later became Law 851. The law almost completely deregulated mines, prohibiting local governments from imposing restrictions on them. Since then, there has been an influx of cryptocurrency mining in Arkansas and, with it, controversies over noise and operations. Bryant says he doesn’t want to repeal that law.
“Repeal wasn’t really an option. The option was to create a state framework like we did with auto racing in the 1990s, with auto and gas compressors in the 2000s, to have state oversight over this industry in order to control it when counties don’t want to to do it. step up and do it yourself,” he said.
Bryant says he just wants to give counties the power to regulate mines, as well as the state if counties choose not to. He says he has met with cryptocurrency industry leaders and doesn’t think the practice is inherently bad. He wants to crack down on “one or two bad actors.”
“[If] they would have complied or been better neighbors a year ago, this really wouldn’t have been a conversation,” he said. “Why Cryptocurrency 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 “prohibited foreign-controlled enterprise.” 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 bans foreign ownership of mines. There is some evidence tying cryptocurrency mining in general to the Chinese government.
Collins says this 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 category membership,” he said.
Collins asked Bryant, who sponsored one of the bills, about it during a committee meeting.
“In fact, if you have someone from, say, Venezuela, and they’re trying to move to America and they’re trying to become a citizen and they’re functioning within the confines of the law, completely innocently, no problem. They are not authorized to make investments.”
Bryant did not share his concerns.
“If you come here and open a facility 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 are they going to ask of you? You?”
Collins said he wanted to see better evidence than he heard in Byrant’s response. He also says the laws don’t really address one of the biggest problems; they don’t reduce the noise.
“[The] The only thing a cryptocurrency mine operator needs to do is apply noise reduction techniques,” Collins said. “They can be very ineffective.”
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 volume. Bryant says he is applying an industry standard.
“Many of my colleagues didn’t want the government to control the noise,” he said. “Some have thought that if you live in a county and the county doesn’t want to pass any ordinance that requires, as a whole, the community to mitigate noise, why are we telling one business to do something that we don’t tell everyone to do ? ?”
Gladys Anderson, who lives near Bono’s 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 limiting noise to 60 decibels, a level that both Anderson and Little Rock Public Radio measured in excess. She is joining other residents in her community to report the noise. Bryant says that, thanks to the new laws, he now has options.
“They have 90 days to comply. I think it will solve the problem. If not, the state will have jurisdiction once the rules are promulgated, or the surrounding neighborhood community will have the right to go to court to make sure they follow one of those noise mitigation procedures.”
An attorney representing the owners of the Bono cryptocurrency mine did not respond to Little Rock Public Radio’s request for comment.