On November 23, Governor Kathy Hochul issued a two-year moratorium banning new Bitcoin mining facilities that use carbon-based energy sources, making New York the first state in the US to do so. However, the state's current half-dozen or so grid-dependent companies and lone miners are unaffected. The law bases this argument on the fact that proof-of-work mining typically makes use of massive computer networks to produce encrypted blocks on the blockchain, which has significant environmental and infrastructure implications.
If the business has already submitted the necessary documentation to operate in New York, the embargo does not apply to new or renewal permits. However, during the next two years, permits won't be extended or renewed for bitcoin miners who don't use only sustainable energy.
Hochul stated in the legislative order that this is the first law of its sort in the nation and that it is a significant milestone for New York in its efforts to lessen its carbon impact.
Along with the moratorium, the new law requires the New York Department of Environmental Conservation to provide an environmental impact statement within a year that analyzes the statewide effects of the proof of work and can be used to guide future policy.
The state senate authorized the recently signed legislation back in June, but Hochul remained ambivalent about it until last week. A number of pro-crypto lobbyists, including New York City mayor Eric Adams, encouraged the governor to veto the bill out of worry that the regulation would impede economic interest in the state and prevent sector expansion.
Insiders in the bitcoin mining sector have informed CNBC that there is a concern that other Democratic US states may follow New York's example. The Chamber of Digital Commerce warned that the endorsement "may create a hazardous precedent" in a statement.
Kevin Zhang of Foundry concurred with the Chamber of Digital Commerce that the regulation might send a bad signal to the sector. Foundry controls Foundry USA, the largest BTC mining pool in the world by total hash rate.
Other blue states frequently imitate New York State, therefore Zhang cautioned that this would provide them with a simple model to follow.
However, the mining sector in New York was quick to react and relocate to other US states. Zhang remarked, "Our customers are becoming hesitant to make investments in New York State.
