Coinbase’s first crypto policy town hall, held in New York City on Thursday, diverged into a debate over the state’s crypto mining policies. The tension escalated as policymakers clashed over New York’s new ban on certain mining practices.
In November 2022, Governor Kathy Hochul signed off on a two-year moratorium on fossil-fuel powered proof-of-work mining facilities in the state. The bill was controversial from the time it was introduced, with advocates citing environmental concerns associated with mining and adversaries pointing to stifled innovation and job losses.
The discourse around cryptocurrency in the New York state legislature was quite positive until environmentalists got involved, Diane Savino, former New York state senator and current senior adviser to New York City Mayor Eric Adams, said during the town hall.
“In one year’s time, all of [our productive conversations] went down the toilet because people were terrified of being considered anti-environment,” Savino said. “Environmental advocates are incredibly organized…With that, I lost half the support I had on the bills on blockchain and they never moved in the assembly as a result of that.”
Micah Lasher, who serves as director of policy for Hochul, disagreed, arguing that the industry was being more deceitful than environmental activists.
“I don’t think the environmentalists were intellectually dishonest,” Lasher said. “I think there was a fair amount of intellectual dishonesty by the industry that made a strategic mistake in suggesting that that bill was equal to an attack on crypto as a general matter.”
The moratorium targets only certain miners using certain forms of energy, Lasher said, so to say the law limits the entire industry is unfounded.
“That subset of the subset had enormously deleterious environmental impacts, that was true,” he said. “I don’t think the industry does itself any favors when it takes that issue and frames it as an existential one for financial innovation in the state of New York.”
Still, Savino said, the moratorium bill was a prime example of lawmakers stepping back from crypto over fear of going against environmentalists.
“[Environment Advocates Action] does an annual list of ‘friends’ of the environment and ‘enemies,’ and the worst enemies get the oil slick award,” Savino said. “No elected official wants to see that go out because it’s mailed to their constituents, so that’s one of the reasons why the crypto mining moratorium went as far as it did in such a short period of time.”
The law threatens economic expansion in the state, particularly in communities with limited growth opportunities, according to Clyde Vanel, assemblymember for New York’s 33rd district.
“In factories that were closed for generations, people were working, getting three times the average wage in the area,” Vanel said of the crypto mining operations, which he visited in 2020. “That was happening in different pockets around the state, where it’s a challenge for economic activity.”
All industries, including crypto, need to think about how to reduce their carbon footprint, Vanel added, but shutting down operations for two years was not the answer. The moratorium will expire in 2024, although there may be efforts in the Assembly or Senate to extend or expand the ban.
The town hall, hosted in New York City Thursday, is part of a new series dubbed “stand with crypto.” Coinbase said it will host similar events around the country in an effort to advance conversations between industry members and legislators.
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