The Arkansas Senate has taken steps to address potential amendments to a 2023 law, known as Act 851 or the Arkansas Data Centers Act, which limited the state’s ability to regulate cryptocurrency mining operations. This law was introduced and passed with bipartisan support just over a week before the end of the 2023 legislative session. Now, Senator Bryan King is leading an effort to modify this law.
Cryptocurrency mining involves the use of large groups of computers to harvest digital currency. These mines are typically located in rural areas due to their need for space and large amounts of electricity and water to operate. Currently, there are crypto mines in DeWitt and near Greenbrier, with citizens of the Greenbrier area filing a lawsuit over noise concerns.
Senator King and other officials have also expressed concerns about foreign ownership of these mines and the potential national security risks they may pose. He stated that the government should be able to regulate this “new industry” that is not yet fully understood.
The Legislature’s fiscal session began on Wednesday and allows for the introduction of unrelated legislation under certain conditions. Seven out of eight proposed crypto resolutions were passed by the Senate, with Senator King sponsoring six of them. These resolutions will now go to the House for consideration.
Some of the proposed resolutions include placing noise limits on crypto mines, prohibiting foreign ownership, requiring licensing for those engaged in mining, and allowing local governments to regulate these operations. Additionally, the Senate voted to expunge a resolution that would have imposed fees on cryptocurrency businesses for their energy usage, with Senator King stating he would give notice if he plans to bring it back for reconsideration.
Senator Joshua Bryant, who sponsored the original Act 851, voted against several of these resolutions, particularly citing his disagreement with the proposed fees. He stated that concerns from 10 years ago about cryptocurrency are not the same as today.
During floor debate, Senator King compared one of the resolutions to a previous law banning the purchase of Russian and Chinese drones in Arkansas due to concerns about ties to the Chinese government. Some senators questioned if this could set a precedent for sanctioning businesses based on the number of jobs created or their country of origin. However, most senators voted in favor of allowing these resolutions to be introduced for further discussion.
The majority of Senate Democrats did not vote on these resolutions, with minority leader Greg Leding stating that he was surprised to see so many potential bills unrelated to the state budget during the fiscal session. He believes that this session should focus on fiscal matters.
If passed by the House, these resolutions could significantly impact the regulation of cryptocurrency mining in Arkansas.
