Two measures designed to oversee cryptocurrency mining operations in Arkansas gained approval from the state Senate on Wednesday and are now poised for review by the House.
With 32 votes in favor, Senate Bill 79 secured unanimous support, while Senate Bill 78 passed with 26 votes in favor and three in opposition. Notably, several senators refrained from voting on either or both bills.
The primary objective of SB78 is to regulate the noise levels produced by crypto mining activities, restrict ownership by specific foreign entities, and authorize local authorities to establish guidelines for these facilities. Senator Joshua Bryant, the bill’s sponsor hailing from Rogers, characterized it as an “administrative remedy” to Act 851 of 2023, also recognized as the Arkansas Data Centers Act.
Although acknowledging potential imperfections in SB78, Bryant stressed the significance of not allowing the pursuit of perfection to impede progress, stating, “I can’t claim it’s flawless, but I don’t want perfection to obstruct progress.”
Act 851, previously championed by Bryant, was swiftly ratified during the concluding week of the 2023 legislative session. This legislation limited the jurisdiction of local governments to regulate crypto mining operations, typically comprising extensive arrays of computers utilized for mining digital currencies, often located in rural areas due to spatial requirements.
Concerns have surfaced among officials regarding the expedited enactment of Act 851, alongside apprehensions regarding probable foreign ownership of these mining operations and associated national security implications.
Prominent crypto mining sites are situated in DeWitt, the Bono community near Greenbrier, and a proposed site near Harrison operated by an out-of-state entity. Senator Bryan King, a vocal proponent of cryptocurrency regulations representing Green Forest, has actively participated in proposing resolutions concerning this sector.
Despite advocating unsuccessful resolutions in the House recently, King was unable to introduce his own regulatory framework during the ongoing fiscal session, primarily focused on the state budget. While King opposed SB78 due to perceived regulatory shortcomings, he endorsed SB79, which mirrors similar provisions and is spearheaded by Senator Missy Irvin from Mountain View.
The formulation of SB79 was reliant on a clause that initially mandated state licensing for crypto mines by the Department of Energy and Environment, a responsibility now transferred to the state Oil and Gas Commission.
Both bills specify that any entity controlled by a prohibited foreign entity must relinquish ownership of an Arkansas-based crypto mine within a year of the policies taking effect.
During deliberations, King questioned Bryant about the extended divestment timeframe, with Bryant citing advice from the Attorney General’s office as the basis for this provision.
Senator Irvin echoed comparable sentiments before the Senate City, County, and Local Affairs Committee, which endorsed an amended version of SB79. The Bono community falls within Irvin’s jurisdiction, with residents expressing concerns about noise disturbances from the local crypto mining facility.
In addition to King, Democratic Senators Greg Leding of Fayetteville and Stephanie Flowers of Pine Bluff dissented on SB78. Both King and Flowers advocated for a special legislative session this year to address further regulations concerning crypto mining.
Expressing reservations about the current bills, Flowers, who represents a portion of Arkansas County where a crypto mine operates near DeWitt, highlighted constituents’ worries labeling SB78 as “problematic legislation.”
Responding to public discontent, Bryant indicated his intent to urge Governor Sarah Huckabee Sanders to call a special session if SB78 and SB79 are enacted but fail to address the community’s concerns regarding crypto mining.
Both SB78 and SB79 contain emergency clauses, signifying immediate enforcement upon the governor’s approval.
Editor’s Note: This article, “Proposed crypto mining regulations clear Arkansas Senate, head to House,” was initially featured in the Arkansas Advocate.