Environmental Groups Seek Injunction Against NY Bitcoin Miner

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In Brief
  • Local activists are contesting a Finger Lakes region power company’s right to build four new buildings for Bitcoin mining.

  • They claim approval for construction was given illegally and will cause ill environmental effects.

  • Some see a larger expansion of mining in the US in the coming years.

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The Finger Lakes Region of New York State is famous for its outdoor activities, boating, and even wine. But environmental activists are now facing a new challenge: Bitcoin miners.

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This December, three environmental groups and a set of individuals are trying to keep Greenidge Generation from building four new structures for additional Bitcoin mining.

Richard Lippes, a Buffalo, NY attorney, filed an Article 78 with the State Supreme Court seeking an injunction to halt construction of the buildings. The appeal was done on behalf of the organizations, which include the Sierra Club and the Seneca Lake Guardian.

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According to Lippes’ document, the Connecticut-based Greenidge Generation and local officials violated the State Environmental Quality Review process when examining the application for construction.

In a nutshell, critics say the construction passed approval too hastily. The justification hinged on a “hard look” that officials needed to take when considering the environment impacts of a project.

The petitioners also say that the new buildings would increase heating and cooling into Seneca lake, which could cause natural imbalances in algae and fish populations. That’s not to mention the potential noise nuisance.

The Other Side of the (Bit)Coin

Meanwhile Greenidge Generation is one of many companies that is seeking to bring business back to American soil. Besides the economic interests of keeping Bitcoin mining in America, some believe that China is developing a monopoly.

With up to 70% of mining on Chinese soil, these pundits argue the People’s Republic of China (PRC) government could seize mining operations across the country and perform a 51% attack.

Mike Colyer, CEO of Foundry, a company that invests in domestic mining, said he believes mining will increase by 25% in the United States in the coming years.

Bitcoin Energy

A strange road led this power company to the Bitcoin mining business. Greenidge Generation operated the local coal power plant for decades. The plant changed hands a few times and in 2011, the firm decommissioned it because of environmental inefficiency and cost.

Then, Atlas Holdings, LLC (based in Greenwich, CT) acquired it in 2014. At this time, the plant was made more energy efficient and converted to natural gas. The addition of a pipeline to bring gas to the site left the owners looking for opportunities to offset costs.

Greenidge says that in 2019 the potential for server hosting onsite became apparent. And in January 2020, they added Bitcoin mining services.

Since then, it has decided to expand that profitable venture. Naturally, a power plant is likely to get a bargain on the power needed to run such an operation.

But the new expansion method has set locals off. The municipality’s planning board approved the construction as an “unlisted action.” This allowed them to skip an Environmental Impact Statement (EIS).

Article 78 seeks an appeal on the grounds that the EIS shouldn’t have been skipped.

Though this is an intriguing technicality, officials say they already have all the official permits, and the legal mechanism to re-evaluate the environmental impact.          

As mining shifts borders and crypto regulations mature, miners too are facing the same level of scrutiny.

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Harry Leeds is a writer, editor, and journalist who spent much time in the former USSR covering food, cryptocurrencies, and healthcare. He also translates poetry and edits the literary magazine mumbermag.me.

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