New York tightens its approach to cryptocurrency regulation, Gov. Kathy Hochul signs one of the strictest cryptocurrency mining laws in the country, Attorney General Letitia James asks Congress to ban pension fund investments in cryptocurrencies.
On November 22, Hochul signed a two-year moratorium on permitting cryptocurrency gas and electricity transactions in New York.
Public support for the cryptocurrency industry is arguably at its lowest point since the currency gained widespread adoption over the past five years. The public bankruptcy and bankruptcy of FTX, formerly one of the largest and most trusted cryptocurrency exchanges, has resulted in its inherent risks as an investment vehicle and a lack of regulation to protect investors.
The bill, which will not affect existing cryptocurrency facilities, will also require the Department of Environmental Protection to study the environmental impact of these operations. Bitcoin mining requires the use of powerful computers to solve complex algorithms - the annual global production of bitcoins consumes more energy than the entire country of Belgium each year.
“This is the first step of a nation and an important step for New York as we work to overcome the global climate crisis,” Hochul wrote in a memo accompanying the signed bill.
The bill, which was passed by the New York State Legislature in April and approved by the State Senate in June, has been supported by environmental groups concerned about the cost of electricity in bitcoin mining.
“Governor Hochul did the right thing by lining up real New Yorkers, not failed outside speculators who choose not to mine cryptocurrencies in more efficient ways that don’t harm the climate, the environment, or the local economy,” said Yvonne Taylor. Seneca Lake Guardian, local environmental group. , in the statement.
Crypto advocates 'very disappointed'
Cryptocurrency companies oppose the growing restrictions that legislation will impose on the industry. The Digital Chamber of Commerce, a pro-cryptocurrency organization, is "deeply disappointed" with Hohul's decision, the group said in a tweet.
James pointed to the demise of FTX and former CEO Sam Bankman-Fried when he asked Congress to limit crypto investment opportunities in a Nov. 22 letter. “This is what Mr. Bankman-Fried once called a typical Ponzi scheme,” James wrote after Congress passed legislation banning the sale of cryptocurrencies to pension funds.
James recommended rejecting two bills that were recently proposed in Congress: the Retirement Savings Modernization Act and the Financial Freedom Act of 2022, which would loosen rules on investing in digital assets.
“Americans’ hard-earned retirement funds invested in cryptocurrencies could erase a lifetime of hard work,” James said in a statement. “We have seen again and again the dangers and pitfalls of cryptocurrencies and the wild fluctuations of these funds.”