Jun 9, 2022 - Economy & Business

New York state senator who sponsored crypto mining moratorium bill is pro crypto

Photo illustration of Senator Kevin Parker Interview surrounded by abstract tech and nature shapes.
Photo illustration: Aïda Amer/Axios. Photo: New York Senate

New York Senator Kevin Parker is the sponsor behind a bill that the crypto industry has broadly panned as being bad for business in the state, but his stance on the industry itself may surprise you.

Why it matters: Crypto shops have long criticized the state for imposing what they consider the most onerous regulations on the industry levied in the country, if not the world. But to Parker, the bill is not about crypto — it's about the power plants involved and making sure they adhere to climate goals the state set in 2019.

Catch up quick: The legislation passed last week. It awaits the governor's signature. But if there was any confusion about where Parker stands on crypto, he'd like to state for the record:

  • "I'm pro crypto and pro crypto mining in the state of New York."
  • The senator also does not own any crypto.

Parker tells Axios that the goal of the bill is not very different than what Senators Carol Lummis and Kirsten Gillibrand outlined specific to energy in their sweeping crypto regulatory bill that was released to the public Tuesday.

  • "This is an issue that's national," Parker said. "I think it makes sense to look at [mining], power consumption, but also not just the consumption but where are you getting your power from — that's what my bill says too."

Peaker plants are what Parker says he's legislating against, a term that describes power plants that only turn on during peak demand hours. The current version of the bill — different than a more expansive one that was introduced last year — reflects that.

  • "We made a couple of other changes to the bill so that it was clear that what we were trying to do was stop the use of these peaker plants and not interfere with the cryptocurrency mining operations of the state," he said.

Details: If signed into law, the bill would pause for two years any new permitting on proof-of-work mining operations that use carbon-based fuel. It also proposes an environmental impact study.

  • Of note: The federal Gillibrand-Lummis bill as it relates to energy only proposes a study, specifically an analysis conducted by the Federal Energy Regulatory Commission with CFTC and SEC consultation.

What they're saying: "If signed into law, this legislation will have a significant chilling effect on crypto mining in the state," said Kristin Smith, executive director of the Blockchain Association, of the state bill in an issued statement on June 3.

  • The Blockchain Association is an industry group that represents crypto mining firms, among other parts of the industry.

Senator Parker also helmed the Gas Tax Holiday Act of 2022, removing the state's motor fuel and sales tax for the rest of the year that went into effect in June. When asked whether that ran counter to his overarching environmental goals, Parker explained:

  • "We are in the middle of a significant affordability gap in our city, state and country. It's one thing to talk about reducing use of gas and petroleum products that contribute to our carbon footprints, it's another when folks are hampered from making a living."
  • "Gas prices are so astronomically high, it's become a hindrance to livability," Parker said. "I've written a letter to the Mayor that we do the same on the city level in order to provide relief to consumers."

What's next: When the bill lands on Gov. Kathy Hochul's desk, she'll have 30 days to sign it into law. Whether a decision is made before or after the state's June 28 primaries, however, remains to be seen.

  • And crypto advocates are intent on persuading the governor to reject the measure.

The bottom line: "These are a bunch of folks who in the finance world are cowboys and they want free rein — that's not helpful in the context of trying to lower our carbon footprint," Parker said. "There are a number of crypto operations in the state of the New York, only one actually operates using these peaker plants."

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