Governor Sarah Huckabee Sanders signed two laws regulating cryptocurrency mining in Arkansas, after months of protests from lawmakers and their constituents.
Much of the push for mining regulation comes from a woman named Gladys Anderson. She lives next to a crypto mine on Bono, a neighborhood near Greenbrier. It's a rural farming community, where residents say they woke up one day to hear a constant screeching and humming noise coming from the mine.
Anderson lives closest to it, just a few hundred yards away. Since then, her story has gone national; speech on CBS NewsHe called the noise โtorture.โ
Criticism of these machines, which generate cryptocurrencies such as Bitcoin, are divided into three categories; They're too loud, bad for the environment, and have foreign ownership ties that make a lot of people uncomfortable.
The Arkansas Legislature's fiscal session, which formally adjourned last Thursday, was designed by law to focus solely on budget issues. But this year, lawmakers made an exception on this issue.
One of the bills was championed by Sen. Joshua Bryant, R-Rogers, who explained his support for the legislation this way.
"Once they are operational under existing ordinances/laws, they will not be banned arbitrarily or capriciously," he said.
In the 2023 legislative session, Bryant sponsored a bill that later became Law 851. The law almost completely deregulated the mines, prohibiting local governments from imposing restrictions on them. Since then, there has been an influx of cryptocurrencies in Arkansas and with it, controversy over noise and operations. Bryant says he doesn't want to repeal that law.
โRepeal really wasn't the option. The option was to create a state framework like we did with auto racing in the '90s, with automobile and gas compressors in the 2000s, to have some state oversight over this industry to control it when counties don't want to give a step forward and do it themselves," he said.
Bryant says he just wants to give counties the power to regulate mines, as well as the state if counties decide not to. He says he has met with crypto industry leaders and does not believe the practice is inherently bad. He wants to crack down on "one or two bad actors."
โ[If] If they had complied or been better neighbors a year ago, this really wouldn't have been a conversation,โ he said. "Because cryptocurrencies have been operating in our state for over a decade."
The first new law allows mines to operate if they comply with noise ordinances. They have to be within 2,000 feet of a residence and cannot be controlled by a โprohibited business controlled by a foreign party.โ The second new law subjects mines that violate the rules to civil penalties.
One of the few lawmakers to vote against the bills was Rep. Andrew Collins, D-Little Rock. He doesn't like the part of the bill that prohibits foreign ownership of mines. There is some evidence linking crypto mining in general to the Chinese government.
Collins says this could be a slippery slope.
"We need to be very careful when we say that someone can't do something, or that they don't have the right to own property or exercise the right to earn a living based on being in a category," he said.
Collins asked Bryant, who sponsored one of the bills, about this during a committee meeting.
โEffectively, if you have someone from, say, Venezuela, and they are trying to move to the United States and they are trying to become a citizen and they are operating within the confines of the law, they are completely innocent, no problem. โThey are not allowed to make any investments.โ
Bryant did not share his concerns.
โIf you come here and open a facility here that uses our natural resources, that has potential cybersecurity threats to our network and other entities, and you are connected to said network, where are your loyalties and what will they ask of you? you?"
Collins said he wanted to see better evidence than what he heard in Byrant's response. He also says the laws don't really address one of the biggest problems; They don't lower the noise.
โ[The] The only thing a cryptomine operator has to do is apply noise reduction techniques,โ Collins said. "They can be very ineffective."
One of the laws lists examples of things like liquid cooling that could be used to keep mines quiet. But that does not force the mine owners to lower the volume. Bryant says he is enforcing an industry standard.
"Many of my colleagues didn't want the government to control noise," he said. โSome thought that if you live in a county and the county doesn't want to pass any ordinance that requires, as a whole, the community to mitigate its noise, why would we tell one business to do something that we don't tell everyone to do? ? ?โ
Gladys Anderson, who lives next door to the Bono crypto mine, said she doesn't trust what Bryant says about the law. But she says she's trying to stay positive about it.
Faulkner County passed an ordinance limiting noise to 60 decibels, a level that both Anderson and Little Rock Public Radio have measured mines exceeding. She is joining other residents in her community to sue over the noise. Bryant says thanks to the new laws she now has options.
โThey have 90 days to comply. I think it will solve the problem. Otherwise, the state will have jurisdiction once the rules are promulgated, or the surrounding neighborhood community will have standing in court to make sure they follow one of those noise mitigation procedures.โ
An attorney representing the owners of the Bono cryptocurrency mine did not respond to Little Rock Public Radio's request for comment.
