Regulation
Senator Bryan King hopes to introduce stricter regulations on cryptocurrency mining in the upcoming special session
Brian Chilson Sen. Bryan King (R-Green Forest)
Senator Bryan King (R-Green Forrest) said today that he will once again propose tougher regulations on cryptocurrency mining when the Legislature convenes in a special session soon.
King said he alerted Senate President Pro Tempore Bart Hester AND House Speaker Matthew Shepherd of his plans. He pointed Recent news The fact that the federal government stepped in to shut down a cryptocurrency mining company in Wyoming that has links to China is one reason the matter deserves another hearing as soon as possible.
King’s proposals for strict regulation of cryptocurrency mining it wasn’t up to par in the fiscal legislative session that ended earlier this month. The legislature instead passed a different pair of bills aimed at addressing various annoyances and concerns surrounding cryptocurrency mining, which have now been signed into law by the governor. However, King argued that the laws had large holes and were largely bogus attempts to calm the cryptocurrency mining controversy while remaining overly friendly to the industry.
King has an opportunity to try again because a special session is likely to be called next month. Due to a combination of legislative incompetence and shenaniganschaos over a proposed relaunch of the Game and Fish Commission The director’s salary led to the budget for the commission not being approved. That puts the entire agency in limbo for the new fiscal year, which begins July 1, so the Legislature will almost certainly reconvene for a special session called by the governor to pass the budget. The special session will likely cost taxpayers about $100,000.
Republican legislative leaders have already suggested who would like to use the opportunity to pass further tax cuts, heavily targeted at the rich. Governor Sarah Huckabee Sanders she will almost certainly be open to that idea, but she will equally certainly not like the idea of accepting King’s proposals.
If the issue of cryptocurrency mining were not the subject of the governor’s call for a special session, the approval of two-thirds of both houses of the legislature would be required for King’s proposals to even be considered. This was the same obstacle King faced during the fiscal session. During a fiscal session, even nonbudget proposals require approval by two-thirds of the House and Senate. King’s list of six proposals gained the necessary approval in the Senate, but fell short in the House. Most House Democrats refused to vote to consider King’s proposals, for what seem like flimsy reasons. They proved to be the decisive obstacle that prevented many resolutions from being heard.
Cryptocurrency “mining” is the process by which bitcoin confirms transactions and creates new bitcoins, using a network of high-powered computers. Unfortunately, this capital-rich industry is loud and terrible for the environment. Cryptocurrency mines have often proven to be a major problem for the rural communities where they have popped up.
Critics have also raised concerns that the mines could pose a threat to national security due to cryptocurrency mining companies with links to China.
Law 851 of 2023reportedly written largely by Satoshi Group — a dark money cryptocurrency advocacy group — has dramatically reduced the ability of Arkansas cities and counties to regulate the industry, giving crypto companies a legal advantage over communities affected by the nuisances they cause. That sparked outrage, sparking local and national media reports and bringing a deluge of election complaints to lawmakers in the affected, typically rural areas.
The co-sponsors of law 851, Senator Joshua Bryant (R-Rogers) e 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 core fears had not been addressed and that new laws were equivalent to 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 primarily restore local control over regulation and establish a new state regulatory and permitting system for cryptocurrency mining. They almost certainly represent an improvement over Law 851, and better than nothing. (And for those focused on the national security perspective, they place limits on foreign ownership for designated nations like China.)
But they still have it some holes and open questions, and not go anywhere near as far as King’s proposals would have done. The fact that the cryptocurrency mining industry is publicly applaud the measures it’s another red flag for critics.
Meanwhile, the New York Times reports that the federal government appears to have real concerns about cryptocurrency mining with links to China:
President Biden on Monday ordered a company with Chinese origins to shut down and sell the Wyoming cryptocurrency mine built a mile from an Air Force base that controls nuclear-armed intercontinental ballistic missiles.
The cryptomining facility, which operates high-powered computers in a data center near the FE Warren Base in Cheyenne, “presents a risk to the national security of the United States,” the president said in a executive orderbecause its equipment could be used for surveillance and espionage.
“The vast majority of machinery powering cryptomining operations in the United States is made by Chinese companies,” the Times reports, a point likely to be raised by King, who had targeted such equipment in his proposals.
King’s resolutions would also impose tariffs on cryptocurrency mines for excessive electricity use, with a megawatt-based fee schedule above certain thresholds. The cryptocurrency lobby argues that this would put cryptocurrency mines out of business, which in itself seems significant.
King’s proposals included various other more stringent regulations, such as the total repeal of Act 851, the restoration of local control for counties and cities to regulate cryptocurrency mining without limitations (including noise ordinances), the ban on property by some foreign nationals (again, China clearly the primary target), flesh out regulatory requirements for new or existing cryptocurrency mines operating in the state, requiring companies to submit six-month advance notification before buying or leasing land for a cryptocurrency mine, monitoring water usage and authorizing the state to take action against a mine if critical underground water supplies have been threatened, and more.
Expect a similar collection of proposals from King when the special session convenes.
“I will work to pass real legislation to protect Arkansans,” King said in a tweet. “Professional cryptocurrency sponsors failed to answer simple, direct questions last session. Other lawmakers also failed to respect the facts.”
Here’s more from the Times report, published Monday:
Chinese-owned cryptocurrency mines have seen a boom in the United States since the facilities were effectively banned in China in 2021. Although some cryptomining activities have since resumed in China, Chinese cryptocurrency entrepreneurs are attracted to the United States for relatively cheap electricity and well-developed laws. system.
The Times discovered 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 linked 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.