ALBANY, NY (WENY) -- The Environmental Conservation Committee of the New York State Assembly has voted to advance legislation that would establish a moratorium on proof-of-work authentication methods for blockchain cryptocurrency mining, for operations such as power plants that generate their own electricity using carbon-based fuels. 

Assembly bill A7389C is sponsored by Ithaca area Assemblywoman Anna Kelles. The Assembly Environmental Conservation Committee approved advancing the bill to the Assembly Ways and Means Committee by a vote of 23 to 7. A companion bill, S6486D is in the Senate Environmental Conservation Committee. The legislation aims to amend state environmental conservation law to establish the moratorium, as well as requiring a comprehensive generic environmental statement review.

Proof-of-work authentication is the type of method used to verify blockchain transactions for Bitcoin, and some other cryptocurrencies. In recent years, cryptocurrency mining operations have popped up across New York State, including in the Finger Lakes region.

Currently, Greenidge Generation in Yates County operates a Bitcoin mining facility at its natural gas power plant in Dresden, on the western shore of Seneca Lake. The facility has drawn criticism from environmental activists who are concerned about the potential environmental impact on the lake, as well as air quality in the area. Greenidge currently operates more than 17,000 Bitcoin miners at its Dresden facility. The company is also in the process of expanding to other locations, including South Carolina. Forty-eight employees currently work at the plant in Yates County. 

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According to the Assembly bill, proof-of-work cryptocurrency mining operations increase the amount of energy usage across the state, and go against the state's energy and climate goals under the Climate Leadership and Community Protection Act (CLCPA). That Act requires that statewide, greenhouse gas emissions be reduced 85% by 2050, and the state has net zero emissions in all sectors of the economy by that time.

If the moratorium legislation becomes law, the state would not approve new applications, or permits to operations that utilize a carbon-based fuel to generate "behind the meter" electric energy to mine cryptocurrency using proof-of-work authentication methods to validate blockchain transactions for a period of two years. Additionally, the state would not approve application or permit renewals during that two year period. 

The legislation also requires that the state Department of Conservation, in consultation with the Department of Public Service, prepare a generic environmental impact statement on proof-of-work cryptocurrency mining. Additionally, the DEC would be required to host public hearings in each region of New York state, providing opportunity for comment. 

If the legislation becomes law, it would take effect immediately.

Currently, there are two environmental permit renewals pending for Greenidge Generation. The ultimate approval or denial of the renewals is expected on March 31st by the NYS DEC. However, it is unclear if this proposed proof-of-work ban could become law before the expected March 31st decision deadline for Greenidge, or if it would affect existing renewal applications awaiting a decision.

Earlier this week, the Sabin Center for Climate Change Law at Columbia Law School published a white paper laying out the legal authority for Governor Kathy Hochul to enact such a moratorium.