The attorney for a Falls cryptocurrency mining facility is lobbying city officials for a public hearing on his client's attempt to obtain a license to operate under the requirements of an amendment to the city's zoning code that governs energy-intensive industries.
At the same time, the attorney for another cryptocurrency miner subpoenaed Mayor Robert Restaino in a bitter ongoing lawsuit filed by the city to shut down his client's operation and collect what is currently approaching a $1 million fine.
William Rossi, an attorney representing BlockFusion, which was operating a Falls cryptocurrency mining facility on a former industrial site on Frontier Avenue, made an unscheduled appearance at the Falls Planning Board meeting Wednesday night. to deliberately inquire about the status of your client's application for an operating permit.
BlockFusion stopped operating its facility in November after the city notified the company that it was violating the energy-intensive industry's zoning code amendment and sought a preliminary injunction to block continued mining there and at two others. cryptocurrency mining facility at the Niagara. Rossi said his client then filed an operating permit application and made changes to comply with the new zoning code requirements.
In December, Rossi said the city requested some "complemental changes" to BlockFusion's application and that the company quickly complied with that request.
Under the new zoning code rules, Rossi told the Planning Board, BlockFusion should have been granted a public hearing on its application within 15 days. He said it's been more than two months and the city still hasn't scheduled a hearing.
"It's not my practice to show up unscheduled," Rossi told Planning Board members, "but I would have expected a firm (hearing) date by now."
BlockFusion's lawyer said that his client wants to do business in the Niagara and needs to know where he stands in the process to obtain an operating permit.
"It's important for them to get this right," Rossi said. "I would be willing to cooperate in any way possible."
Rossi acknowledged that BlockFusion filed a lawsuit challenging the zoning code changes, but noted that the lawsuit was only brought to protect the company's rights while its operating permit application was pending.
โIt is not our intention (to have to challenge the law),โ Rossi told the board. "If we could have the opportunity to demonstrate our compliance (with the law), we would appreciate it."
Former Falls City Council President John Spanbauer, who is now on the Planning Board, told Rossi that the city โneeds to get betterโ at handling the BlockFusion application.
On Friday, Restaino said that due to litigation with another cryptocurrency mining company, and because BlockFusion is the first applicant for an operating permit under the new zoning code regulations, the city has been moving "very cautiously." .
Everyone is watching this,โ Restaino said. โWe want to make sure that BlockFusion crosses the finish line because it shows that our (new) charter works.โ
The mayor said that the city's attorneys had some "additional comments in response" to BlockFusion about its application.
โ(The city attorneys) are moving as quickly as possible, but we are moving carefully,โ Restaino said. "And we look forward to a nice conclusion."
Restaino also confirmed that he met on Tuesday with a representative of US Bitcoin, which is embroiled in a bitter legal battle with the city over changes to the high-energy use zoning code. In court proceedings, city attorneys have repeatedly contrasted US Bitcoin's refusal to comply with zoning code changes with BlockFusion's attempt to follow through with the operating permit application process.
The mayor said he "shared some thoughts" with the US Bitcoin representative on ways to resolve their dispute.
โThen, on Thursday, I was summoned by his lawyers,โ Restaino said.
The subpoena requires the mayor to testify during hearings in mid-March on the city's request for a preliminary injunction to compel US Data Technologies Group Ltd. and US Data Mining Group Inc, doing business as US Bitcoin, to comply. with the new zoning. amendments to the code governing energy-intensive industries.
Prior to those hearings, State Supreme Court Justice Edward Pace has scheduled a conference for March 3 to determine what will be the content of an injunction seeking to fine and shut down US Bitcoin operations. Pace ordered attorneys for the city and US Bitcoin to meet with him to resolve an ongoing dispute over a draft order that would enforce an earlier ruling that made him find the cryptocurrency mining company, which operates a facility in Buffalo. Avenue, in contempt of an order from another State Supreme Court judge ordering the company to close its operations.
That ruling, by State Supreme Court Justice Frank A. Sedita III, had ordered US Bitcoin to immediately cease operations of its Buffalo Avenue facility while the preliminary injunction lawsuit progressed through the court process.
Pace ruled on Jan. 25 that US Bitcoin was knowingly operating its cryptocurrency mining facility in violation of the order issued by Sedita and found the company in contempt. The judge also ruled that if US Bitcoin continued to operate its facilities, it would impose fines of $10,000 per day until February 1, and then increase the fines to $25,000 per day until cryptocurrency mining stopped.
The courts imposed the fines, which date back to December 9, because that was the date Sedita first issued its temporary restraining order (TRO) ordering US Bitcoin to cease operations.
Pace also directed the attorneys representing the city to draw up an order for him to sign and enforce his judgment. In such cases, the attorneys writing an order typically share it with the opposing attorney.
In this case, the attorney representing US Bitcoin, John Bartolomei, has repeatedly raised objections "to every proposed draft order."
The March conference is expected to resolve what the content of the injunction should be and implement it immediately. Bartolomei has indicated that he intends to appeal any Pace order to the Fourth Department of the Appellate Division of the State Supreme Court in Rochester.
By setting the conference date, Pace reportedly reaffirmed his central decision and reaffirmed that the fines against US Bitcoin will continue to pile up.
Fines now exceed $1 million.
In addition to US Bitcoin and BlockFusion, there is another cryptocurrency mining operation in Falls. That facility has been closed since the summer due to a fire at an electrical substation on their property.
