New York becomes the first state to restrict cryptocurrency mining
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New York Gov. Kathy Hochul (D) on Tuesday signed a law temporarily restricting cryptocurrency mining in the state over environmental concerns, making it the first state nationwide to implement such a move.

The bill was delivered to the governor on Tuesday after the state legislature passed the measure in June, and The Associated Press reported that Hochul signed the measure.

The restrictions also come after the collapse of the cryptocurrency exchange FTX, which has led to growing scrutiny of the industry.

But the New York law instead takes aim at the technology’s environmental impact, establishing a two-year moratorium on permits for fossil fuel plants used for cryptocurrency mining that utilizes “proof-of-work authentication.”

The technology, which is used for Bitcoin and other cryptocurrencies, requires large amounts of energy, and the law’s text suggests its use makes achieving the state’s climate goals more difficult.

The law also mandates the state’s Department of Environmental Conservation studies the environmental impact of mining operations that use the authentication method.

“It is the first of its kind in the country and a key step for New York as we work to address the global climate crisis,” Hochul wrote in a memo approving the bill, which was tweeted by Times Union reporter Josh Solomon.

The bill in part led to a flurry of lobbying activity from the industry. Bloomberg reported in February that pro-cryptocurrency groups were spending $1.5 million on a lobbying blitz in the state.

Hochul during a debate for her re-election last month said she was “looking at that bill closely” and remained noncommittal, while Republican gubernatorial nominee Lee Zeldin said he wouldn’t sign it.

The Digital Chamber of Commerce, a cryptocurrency trade association, issued a statement indicating disappointment with Hochul’s decision on Tuesday.

“To date, no other industry in the state has been sidelined like this for its energy usage,” the group wrote on Twitter. “This is a dangerous precedent to set in determining who may or may not use power.”

“The PoW mining industry has been spurring economic growth, job creation, and inclusion for historically underrepresented populations in New York, while also creating financial incentives for the buildout of renewable energy infrastructure,” the group added. “With this legislation becoming law, we expect the mining companies, or those considering business in the state, to leave and head to more friendly regulatory jurisdictions in the U.S. – a trend far too many industries in New York State are realizing daily.”