Restrictions on Crypto Mining: Arkansas Legislators Approve New Bills to Regulate the Sector
This week saw another crackdown on the crypto industry after Arkansas lawmakers passed two bills to address criticism of previous regulations on mining operations.
Over the past few years, the US government has attempted to tighten its control over different sectors of the crypto industry. As a result, these efforts have received significant backlash from politicians and central figures within the crypto space.
New Crypto Mining Regulations in Arkansas
The Associated Press (AP) news outlet reported Wednesday that the Arkansas House of Representatives gave final approval to two bills related to crypto mining operations in the state. The two Senate-backed bills, SB78 and SB79, were among the few non-budget items on the legislative session’s agenda and were “overwhelmingly approved” by the House Republican majority. They’re on their way to Republican Gov. Sarah Huckabee Sanders’ desk.
Last year, Arkansas lawmakers faced backlash after passing the Arkansas Data Center Act of 2023. The passed Act 851 laid out overall favorable regulatory ground for crypto miners in the state, establishing clear definitions and guidelines.
As reported by an outlet media, the law included provisions prohibiting discrimination against digital asset miners. Additionally, it sought to protect crypto mining companies from “discriminatory regulations” and ensure their equal treatment as data centers. Law 851 was criticized for limiting the local government’s ability to enact measures to regulate mining companies.
The Arkansas Senate and House of Representatives intend to address complaints about last year’s law with newly passed bills, which address the reaction of local officials and residents living near the operations, who complained about the impact of noise on the community. As a result, lawmakers added a requirement for noise reduction techniques and a state permit to operate.
Additionally, the two bills addressed restrictions on the use of water for cooling techniques and removed the limitation to regulate sound decibels generated by mining facilities. Republican Representative Rick McClure stated:
“Let’s do what we can to help those who have been negatively affected and work to find better solutions.”
Furthermore, the passed bills prohibit the ownership of crypto mining businesses by companies and individuals from several countries, including China. However, it continues to restrict the regulatory power of local authorities over issues such as domestic mining by individuals or the rezoning of areas where crypto mining companies are located.
Governor Sanders Will Sign Bills Despite Concerns
According to AP, one of the representatives who voted against the bills, Democrat Andrew Collins, expressed concern about the wording of the limit and the impact it could have on foreign investment:
“We are casting a net that is both too wide and too narrow. It’s going to catch people who are completely innocent and it’s going to leave out many people who are local or from countries that are not on this list.”
Rep. Justin Gonzalez also voted against the bills. During an interview on Wednesday, he expressed his opinion on the matter. For him, the bills “will allow local governments to discriminate against a company simply because of what it is.”
Regardless of the opposition’s concerns, Arkansas’ governor is expected to sign the bills into law. Sanders spokesperson Alexa Henning stated in an email that both bills will be signed, further claiming she added the following:
“The governor was the first in the country to expel a Chinese communist-owned company from the state and strongly supports banning foreign adversaries from owning cryptocurrencies in Arkansas, while protecting rural communities and empowering them to take action energy against bad actors.”
By Leonardo Perez