Per the New York Times, New York enacted a temporary ban on new cryptocurrency mining permits at fossil fuel plants, a move aimed at addressing the environmental concerns over the energy-intensive activity. The legislation signed by Gov. Kathy Hochul was the latest setback in a bruising financial month for cryptocurrencies.
According to Fast Company, In the past few years, cryptocurrencies and other “digital assets” have seen explosive growth, surpassing a $3 trillion market cap worldwide last November, up from $14 billion five years earlier. VCs have invested nearly $12.5 billion in cryptocurrency and blockchain companies globally in 2022 so far, outpacing last year’s total investment of $30.7 billion. And a Pew Research survey last November found that 16% of adult Americans (and about 30% of those between ages 18 and 29) have invested in, traded, or used cryptocurrencies.
The Blockchain Association spent some $225,000 on lobbying in Albany this year to try to defeat the bill Hochul just signed and promote alternative legislation. Members of the association also donated thousands of dollars to Hochul’s surprisingly tight campaign, which left some environmental advocates worried she might let the bill die. State legislators passed the bill back in June, and Hochul faced an end-of-the-year deadline to sign or veto it. New York state passed a Climate Act in 2019 to slash its greenhouse gas emissions by at least 85 percent by 2050.
New York’s Mining Moratorium will likely be mimicked across different states that have state legislatures controlled by progressive, environmentalist legislators. When deciding whether to mine Bitcoin, make sure to work with a provider that can explain their host jurisdiction’s regulatory stances on mining for cryptocurrency.
Lessons From the FTX Collapse
FTX, a popular cryptocurrency exchange, filed for bankruptcy protections earlier this month. Industry voices continue excoriating FTX CEO Sam Bankman-Fried, as the circumstances surrounding its collapse begin to smack of naked fraud. One of the most important lessons from FTX collapse is self-custody – the concept of holding your cryptocurrency portfolio in a digital wallet that you control. Prior to the FTX collapse, more and more retail investors had been making the move to self-custody. Per CoinTelegraph:
On-chain exchange flow data is showing a surge in withdrawals to self-custody wallets, according to analytics provider Glassnode. In a Nov. 13 post on Twitter, Glassnode reported that Bitcoin exchange outflows had hit near historic levels of 106,000 BTC per month.It added that this has happened only three other times — in April 2022 and November 2020, as well as in June/July 2022.
Thirty-seven states have addressed legislation regarding cryptocurrency, digital or virtual currencies and other digital assets in the 2022 legislative session. Examples of enacted legislation include:
As Blockchain and Cryptocurrency gain wider acceptance, and cross larger adoption rate thresholds, more legislatures will pass additional legislation regulating this growing industry.