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New York bitcoin mining ban’s fate now in governor’s hands

By Monte Stewart


Updated

Bitcoin Mining
Bitcoin mining faces a ban in New York after the state's Senate approved a bill prohibiting the proof-of-work mining method for two years. - Photo: Getty Images

Bitcoin mining advocates are calling on New York Governor Kathy Hochul to veto a bill that would ban the mining of digital coins using the proof-of-work method.

New York’s Senate approved the bill early Friday morning after the state assembly provided its blessing in April. Hochul now holds the bill’s fate in her hands as she decides whether to veto the proposed legislation or sign it into law.

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Active mining region

New York is one of the most active bitcoin mining regions in the US, which has emerged as a global leader in cryptocurrency production.

“This is a significant setback for the state and will stifle its future as a leader in technology and global financial services,” Perianne Boring, founder and president of the Chamber of Digital Commerce told CNBC. “More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State,”

If Hochul signs the bill, New York would introduce a two-year moratorium on future proof-of-work crypto mining projects, which are used to mine bitcoin and are considered more energy-intensive than the proof-ot-stake mining method. New York lawmakers are attempting to reduce the state’s carbon footprint by curbing bitcoin miners’ use of electricity from fossil-fuel-fed power plants.

The bill contends that continued expansion of proof-of-work bitcoin mining operations would “greatly increase” energy usage in the state.

Kathy HochulNew York Governor Kathy Hochul (Photo: Getty Images)

Close vote

However, Boring told CNBC proof-of-work mining is complying with efforts to reduce fossil-fuel consumption.

“Proof-of-work mining has the potential to lead the global transition to more sustainable energy,” Boring said.

The Senate voted voted 36-27 in favor of the bill. If Hochul signs it into law, new bitcoin mining permits and existing permit renewals will be banned for two years as the state studies proof-of-work mining and related social and economic costs and benefits.

Galaxy Digital’s Amando Fabiano told CNBC that “New York is setting a bad precedent that other states could follow.”

Ether (ETH) to USD

Hochul accused of favoring sector

But Yvonne Taylor, vice-president of the non-profit environmental group Seneca Lake Guardian, said Hochul must respect the lawmakers’ decision.

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“Now, it’s up to Governor Hochul to side with New Yorkers, not outside speculators, and sign this bill into law,” said Taylor during an online news conference.

Taylor and other environmentalists have accused Hochul of favoring the crypto mining sector after accepting campaign donations from it.

 

Ether to switch methods

On Twitter Anthony Pompliano, author of a widely read cryptocurrency newsletter, predicted that a court would scrap the law if it takes effect.

“New York is explicitly attacking American citizens' right to protect their private property with their proposed bitcoin mining ban,” he tweeted. “This will likely be deemed a violation of the Fifth Amendment and unconstitutional.

While the Fifth Amendment is known for allowing people the right to remain silent in legal proceedings, it also applies to a citizen’s right to life, liberty or property and requires that owners be compensated when private property is put to public use.

But Gabor Gurbacs, a director with crypto investment firm VanEck, the the MVIS bitcoin index, advised Pompliano not to worry.

“It’s Okay. Other states will happily take the business,” tweeted Gurbacs. “New York is past.”

Ether, the digital coin backed by the Ethereum blockchain, is also mined through the proof-of-work method but is slated to shift to shift to proof-of-stake later this year.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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