Plattsburgh Freezes Cryptocurrency Mining Operations – First US City To Ban

Blockchain, News, Regulation | March 16, 2018 By:

Plattsburgh, a tiny municipality in the US state of New York next to Niagara Falls, has officially halted cryptocurrency mining operations in its territory. The ban will extend for 18 months, making it the first US city to stop mining facilities.

Plattsburgh, a city with a population of 20,000, suspended bitcoin mining operations on Thursday for 18 months “to allow the city of Plattsburgh the opportunity to consider zoning and land use laws and municipal lighting department regulations before commercial cryptocurrency mining operations result in irreversible change to the character and direction of the city.”

The proposed moratorium, which was advanced by Mayor Colin Read, was spurred by concerns over excessive power use in the area, drawn from Plattsburgh’s access to hydroelectrical resources at nearby Niagara Falls. Crypto mining requires machines with dedicated high-performance hardware, leading to high electricity consumption. Residents had seen electricity bills increase by $100 to $200 since the beginning of the year.

The Municipal Lighting Department has identified at least two mining farms in Plattsburgh and their combined power consumption is around 11.2 megawatts, which is roughly 10 percent of the city’s power supply. The city council is worried that due to the excess utilization of power, electricity costs for ordinary citizens may go up.

“Bitcoin mining operations are adding on top of that (local energy demands), so we have to buy more power—definitely this year we’ve had to buy a lot more power,” said Bill Tracey, Head of the Municipal Lighting Department. “My system only has a certain amount of capacity in it, and if they use that capacity, then I’m going to have to spend millions of dollars upgrading.”

The moratorium will stop giving approvals for site plans, special use permits, building permits, or any other permit related to commercial cryptocurrency mining.

“Any firm, person, corporation, or other entity that shall establish, place, construct, erect or in any way site or locate a commercial cryptocurrency mining operation described in this local law in the city of Plattsburgh in violation of the provisions of this local law shall be subject to, in addition to any penalties prescribed by state or local law, a civil penalty of not more than $1,000.00 for each day or part thereof during which such violation continues,” explains the Mayor’s proposal.

Speaking to WCAX, David Bowman of Plattsburgh BTC said he understood the rationale of wanting to protect local constituents, but he doesn’t think a full moratorium is necessary.

“You know you need to like protect people in the town from being adversely affected by increased electricity rates but I think there are ways to do that like possibly charging the miners more,” Bowman said. “I think it’s not a great idea to just completely ban the whole thing – it’s just too new.”