The election of Donald Trump back into office was cheered by cryptocurrency enthusiasts across the country for his public support of the industry. After all, the president even has his own memecoin ($TrumpCoin, of course) and has issued executive orders proclaiming support for the industry during his first days in office. Yet, even if efforts to rein in the energy-guzzling crypto mining industry at the federal level (previously covered by ELM here and here) are abandoned, miners still face regulatory challenges targeting its voracious energy use at the state and local levels.
Indeed, states with underdeveloped or abandoned swaths of rural areas typically attractive to crypto-mining outfits due to their cheap land and desperate need for local economic activities are gradually learning that the crypto miners they previously welcomed with open arms have stretched thin resources and power grids not built to support the energy demands of massive mining facilities. The jury is still out, however, as to whether increased local regulatory activity over the crypto mining industry is a true threat, given recent failures to roll back its expansion.
Even in the red state of Arkansas, where state lawmakers had previously deregulated crypto-mining operations to encourage industry development via Arkansas Data Centers Act in 2023, the same legislative body proposed a flurry of regulations aiming to regulate crypto-mining operations amid environmental, security, and even noise concerns during 2024. One of the sponsors of the freewheeling Data Centers Act even supported a new round of laws, explaining that, “[If] they would have complied or been better neighbors a year ago, this wouldn’t have really be a conversation.” Many public comments submitted by Arkansas residents last month support this position and are rooted in the belief that crypto-mining facilities should pay more for its aggressive use of the state’s power grid.
Despite the efforts going into launching it, the crypto-limiting bill up for consideration, however, was shot down on January 30, when the Arkansas Senate City, County and Local Affairs Committee voted 6-1 against a prohibition of crypto-mining facilities within 30 miles of military bases. This would have directly impacted a crypto mine under construction in Cabot, a town within the applicable radius of Little Rock Air Force Base. The measure had been supported by critics who say that mining operations created pollution and used so much energy that it harmed local communities, depriving them of services. It also banned foreign ownership of mining operations given national security concerns. The bill died in committee. One local lawmaker who did not support the bill suggested that if the federal government did not see a threat from the industry, neither should Arkansas.
Even states that had earlier been legislatively successful in slowing down the expansion of crypto mining, such as New York (covered extensively by ELM here), have faced new obstacles in effectively stymieing energy-demanding operations, even in the face of public outcry. As analyzed at length by ELM over two years ago, Greenidge Generation crypto-mining facility, a former coal-fired plant located near Seneca Lake, had previously been denied a permit renewal on the basis that the plant would vastly increase emissions without generating new power, which is antithetical to the goals of New York’s Climate Leadership and Community Protections Act.
It appears, however, that the facility has continued to operate, despite being issued multiple permit denials from the New York State Department of Environmental Conservation, by investing in a drawn-out appeals process that has only resulted in three additional denials by the NYSDEC. For its part, Greenidge claims that the NYSDEC lacks the authority to deny the air permit. A New York State Supreme Court judge, however, found that the agency does indeed have this authority, but that the issue of justification for the denial of Greenidge’s air permit was still an open question. The issue is currently being litigated, to the great frustration of legislative members, since New York State law enables the mining operation to function while Greenidge pursues its appeal.
Although we are only a little over a month into 2025, even in places where attempts to halt or at least pause the expansion of crypto mining were previously successful, as in New York, or at least showed great promise, as in Arkansas, the year has so far been a win for the previously beleaguered industry. We have 11 more months, however, to see if that streak is merely a hot one – or whether 2025 will be the year that local governments lose the regulatory battle against crypto mining.