Arkansas Senate Passes Bills to Regulate Crypto Mining Industry

The Arkansas Senate has passed two bills, SB78 and SB79, aimed at regulating the cryptocurrency mining industry in the state. The bills seek to address issues that have arisen from the Arkansas Data Centers Act of 2023 (Act 851), which opened the door for crypto mining operations but led to concerns about noise pollution, energy usage, and foreign ownership.

SB78, co-sponsored by Rep. Rick McClure and Sen. Joshua Bryant, focuses on four main components: imposing intensive noise mitigation requirements, mandating crypto mining facilities to be at least 2,000 feet from residential or commercial structures unless located in an industrial zone, returning local control to municipalities to regulate crypto mines, and prohibiting crypto mines from being owned by people or governments from certain countries, including China. "SB78 would restore local control to counties by repealing part of the Arkansas Data Centers Act of 2023," Sen. Bryant explained.

SB79, co-sponsored by Rep. Jeremiah Moore and Sen. Missy Irvin, establishes a new state regulatory system for crypto mines, including a licensing system through the Oil and Gas Commission, compliance with the requirements of SB78, and enforcement of rules against foreign ownership. "SB79 aims to provide a basic framework for state oversight of crypto mining in conjunction with local governing authorities," Sen. Irvin stated.

Both bills define a 'prohibited foreign party controlled business' as one in which the party possesses an ownership interest of greater than zero percent, and they provide such businesses one year to divest their interest. The bills also state that civil penalties and damages received by the attorney general's office would be split between the state Oil and Gas Commission fund and the attorney general's office.

Why this matters: The regulation of the crypto mining industry in Arkansas has significant implications for the state's economy, environment, and national security. These bills aim to strike a balance between fostering the growth of the industry and addressing the concerns of local communities and stakeholders.

Supporters of the crypto mining industry in Arkansas argue that it represents a substantial economic opportunity for the state, with the potential for significant tax revenue. However, they also acknowledge the need to address legitimate concerns from local residents regarding noise pollution and energy consumption. The Arkansas Senate's passage of SB78 and SB79 marks an important step towards establishing a regulatory framework that can help the industry thrive while mitigating its negative impacts.

Key Takeaways

• Arkansas Senate passes 2 bills (SB78, SB79) to regulate crypto mining.
• SB78 imposes noise mitigation, location, and foreign ownership restrictions.
• SB79 establishes a state regulatory system for crypto mining licenses.
• Bills aim to balance industry growth and address local community concerns.
• Crypto mining seen as economic opportunity but with environmental impacts.