Last week, New York dominated the cryptocurrency media headlines in very different ways. In the state of New York, the local Assembly voted in favor of the bill that would prohibit for two years any new mining operation that is based on consensus proof-of-work (PoW) mechanisms and that uses energy generated by fossil fuels.
The temporary moratorium, which could be extended once the state Department of Environmental Conservation submits its assessments of the industry’s carbon footprint, marks the first major legislative attack on PoW mining for environmental reasons in the United States. The push mobilized the community, after digital asset advocacy groups raised the alarm on Twitter. Afterward, ban advocates had to endure three hours of heated debate to narrowly pass the bill. An even closer fight is expected in the New York State Senate.
Meanwhile, New York Mayor Eric Adams set an example of supporting innovation by lashing out at his state’s BitLicense regime during an interview at the London Cryptocurrency and Digital Assets Summit. As a newly elected politician who has claimed to collect all three of his salaries in Bitcoin (BTC), Adams called the license – the only one at the state level – a “high barrier” and urged lawmakers that if they don’t think outside the box, by least do not destroy the box itself.
Another example of a reasonable approach to regulation was exemplified by New York State Senator Kevin Thomas, who has introduced a bill to define, penalize, and criminalize fraud specifically targeting developers and projects that seek to dupe crypto investors. . The amendment would impose rug pull charges on developers who sell “more than 10% of said tokens in the five years following the date of the last sale of said tokens.”
A discussion that has come to stay
While some consider the New York State legislature to be “dominated by radical and fringe elements” who are “ignorant of an innovative new sector of finance and technology,” the PoW moratorium bill could represent, indeed, a notable first case of legislative action regarding the sustainability of crypto mining. The standoff over the energy consumption of the various consensus mechanisms and whether it is renewable or fossil fuel-generated energy that powers mining operations has been building for some time at the federal and international levels. These battles will undoubtedly intensify in the coming months and years. After all, not everything is bad. Some experts see the Albany lawmakers’ efforts as a “prudent move” to push miners toward the green transition, even though it may initially have a chilling effect on their operations.
Regulation Party in Latin America
As one of the major South American jurisdictions, Brazil passed its first bill regulating cryptocurrencies in a plenary session of the Senate. Under the bill, which still needs approval from the Chamber of Deputies, the executive branch will draw up rules for crypto assets and create a new regulator or crown the Securities Commission or the Central Bank of Brazil as the main regulator for the sector. Panama is already one step ahead, with its own cryptocurrency law passing the third and final round of consideration. Now, it is the president’s turn to give the bill the green light. The main supporter of the initiative, congressman Gabriel Silva, believes that the law “will help Panama become a center of innovation and technology in Latin America.” Meanwhile, Cuba is expected to start issuing virtual asset service provider licenses from May 16.
CFTC gains momentum
The United States Commodity Futures Trading Commission, one of the main power centers in the crowded US crypto regulation scheme, seems to have scored a few extra points in the race. A bipartisan group of lawmakers re-introduced the Digital Commodity Exchange Act, which would bring cryptocurrency developers, dealers, exchanges, and stablecoin providers under the purview of the CFTC. Of course, the mandate would extend only to cryptocurrencies considered commodities, while the US Securities and Exchange Commission would still have power over digital asset security offerings. Well received by the cryptocurrency community, the bill should first go through the first hearing of the United States House of Representatives Committee on Agriculture.
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