Proposed Crypto Mining Regulation Passes Arkansas Senate, Passes House • Arkansas Advocate

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

Senate Bill 79 passed with 32 votes in favor and no dissents, while Senate Bill 78 approved with 26 votes in favor and three against. Some senators abstained from voting on one or both bills.

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

“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 in the final week of the 2023 legislative session. The law limits the ability of local governments to regulate cryptocurrency mines, which are large clusters 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 Bill 851 passed through the Legislature and raised concerns about potential foreign ownership of the mines and national security risks.

There are cryptocurrency mines in DeWitt and the Bono community near Greenbrier, and an out-of-state entity attempted to start a cryptocurrency mine near Harrison. Sen. Bryan King, R-Green Forest, represents Harrison and has been one of the legislature’s most vocal supporters of cryptocurrency regulation.

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

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

The resolution that allowed SB79 to be drafted contained text that would have required cryptocurrency mining to be licensed by the state Department of Energy and Environment. The bill would put that responsibility in the hands of the state Oil and Gas Commission.

Both bills would give “foreign-controlled prohibited activity” exactly one year after implementing policies to divest from ownership of a cryptocurrency mine in Arkansas.

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

Irvin made a similar statement Tuesday to the Senate City, County and Local Affairs Committee before it passed an amended version of SB79.

The community of Bono is located in Irvin Township, and local residents have filed a lawsuit alleging noise pollution caused by the local cryptocurrency mine.

Senator Bryan King, R-Green Forest (Arkansas Legislature)

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

King and Flowers both said the Legislature should hold a special session this year to consider additional cryptocurrency regulations.

“What concerns me … is that we’re going to kick the can down the road on rules and regulations,” King said.

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

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

Bryant said he will urge Gov. Sarah Huckabee Sanders to call a special session if SB78 and SB79 become law but do not solve the public’s problems with cryptocurrency mining.

Both bills contain emergency clauses and would take effect immediately upon Sanders’ signature.

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