Crypto Becomes a Repeat Campaign Question for Hochul – The Legislative Gazette

Photo courtesy of Spectrum News.

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

The bill, which would impose a two-year moratorium on proof-of-work cryptomining in New York state and call for an environmental study of the industry’s impact, has not been signed into law since it was passed on June 2.

Proof-of-work cryptomining is considered more polluting because it consumes extremely large amounts of energy, often derived from coal or natural gas, and pollutes local air and water supplies.

In response to the question, Hochul said, “I’m looking closely at this bill, it has nothing to do with whether or not we embrace the cryptocurrency industry.” She also cited the department’s effective shutdown of Greenridge Generation, a crypto-mining facility of Environmental Conservation after failing to renew their permit to fly.

Greenridge Generation, formerly based in Dresden, New York, released total emissions of 514,012 tons CO2e of greenhouse gases in 2021 corresponding the New York State Department of Environmental Conservation. This led to the approval notice from the DEC. Previously, environmentalists pushed against its operation, citing its impact on Lake Seneca water temperatures and the local environment.

Gov. Hochul previously said she was unable to review and sign the bill because she is responsible for countless other laws. At a primary debate in June, she said: “This bill came at the very end of the session. We didn’t have a chance to keep our legislative team busy solving problems or saying yes or no or [make] all changes that normally occur in the process.”

Republican gubernatorial nominee Rep. Lee Zeldin said he had no interest in signing the law into law if it was elected Nov. 8. He said: “I wouldn’t and we shouldn’t pick winners and losers in the business and you see how it’s being played out right now as far as they raising and donating money to my opponent who’s trying to ingratiate himself.” Corresponding of the New York State Board of Elections, Ashton Soniat, Chairman and CEO of Coinmint, a cryptocurrency company with a mining operation in Massena, New York, donated $40,000 to the Friends of Kathy Hochul political action committee in May.

Proof-of-work crypto mining uses computers to solve complex mathematical problems in order to release blocks of cryptocurrency to its operators. This process requires high processing speed from computers, which in turn consume a lot of energy. The branch used as a whole more energy than some countries.

It also produces heat. In order to cool the computers properly, hoses run water along them to regulate their temperature. The water is then discharged into sewage treatment plants or into surface water such as lakes or rivers. The Greenridge Generation has dumped 140 million gallons of hot water into Seneca Lake during operation.

In September, Kelles and climate justice advocates urged Governor Hochul to sign the law into law, noting that proof-of-stake crypto mining is a less harmful alternative for crypto miners concerned about the health of the industry.

“During the past legislature, the blockchain and particularly the cryptocurrency industry has repeatedly claimed that this bill for a two-year moratorium on the use of fossil fuel power plants, which means it is very specific and narrow, would kill the cryptocurrency industry here in New York and this industry argument doesn’t hold water, as the past week has shown. Ethereum’s successful merger demonstrates that proof-of-work cryptocurrency mining is not required for the industry to grow, even here in New York, and most importantly, crypto can be energy efficient while it continues to grow in New York without to use 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 method on September 15th. Ethereum states that this will reduce the energy consumption of its cryptocurrency by 99.5 percent. That’s because Proof of Stake Mining does not rely on computer-based and energy-intensive problem solving. Instead, miners, now called validators, are asked to verify cryptocurrency transactions and validate block information in order to release the cryptocurrency to themselves.

On Kelles’ point about the safety of the proof-of-stake, David Banks, program director for globalization studies at the University of Albany, said: “New York’s threatened ban appears to have been good enough to likely save many communities from some very serious environmental problems.” . Crypto mining outfits in other states and countries have been known to set up shop in old industrial buildings with little to no regulation or community benefits as these things neither source local materials nor create jobs. Proof-of-stake tends to address these environmental concerns.”

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

Earthjustice, a non-profit environmental rights organization, published a comprehensive white paper on the environmental and community concerns faced by parts of the country and state where crypto mining operations take place.

“We are very concerned that this industry is not in line with government climate targets given its energy consumption. So we’ve been working with a number of partners across the state to urge Governor Hochul to sign this legislation into law to ensure we are not directly violating our climate law,” said Earthjustice political advocate Elizabeth Moran.

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