New York Hit With Lawsuit After Crypto Mining Facility Approval

In New York’s latest crypto mining setback, an environmentalist collective moved to block the conversion of a long-time power plant to a proof-of-work cryptocurrency mining facility.

The Clean Air Coalition of Western New York and the Sierra Club slapped the overseeing state agency — the New York State Public Service Commission — with a lawsuit on Friday, which the plaintiffs dubbed as the “first to demand that a state agency follow the legal obligations established by” New York’s “landmark climate law.” The litigation also named related parties.

State overseers violated New York’s Climate Leadership and Community Protection Act (CLCPA) by permitting “a fossil fuel-burning Proof-of-Work (PoW) cryptocurrency mining operation,” according to the nonprofit environmental law firm Earthjustice. A representative for Earthjustice did not immediately return a request for comment.

The CLCPA — passed in 2019 and hailed by supporters as a revolutionary measure to combat climate change — requires all electricity in New York to emit zero emissions by 2040. In 2021, efforts began circulating in the state legislature to pass a bill that would establish a moratorium on cryptocurrency mining operations that use PoW methods.

After that bill passed the state assembly, John Olsen, the New York lead for crypto lobbyist Blockchain Association, told Blockworks that its intention was to “prevent new mining operations that would draw power from fossil fuel generation,” even in part.

“The impact, though, is really just economic in the sense that good paying jobs are going to be going to other states, and mining operations that would face less regulatory scrutiny, in terms of environmental impact, would be setting up shop [in another state],” Olsen then said.

The bill was eventually signed into law by New York Governor Kathy Hochul in November 2022 — after Digihost’s takeover had already been greenlit.

Digihost began testing the facility in February 2022, resulting in a spark of noise complaints and environmental concerns from nearby residents, according to local news reports. The company said it would add sound-proofing panels to cut down on noise — but as of September, residents reportedly said the situation had improved little.

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