New York State passes legislation limiting some cryptocurrency operations

June 3 (UPI) -- New York State lawmakers passed a bill late Thursday that would establish a two-year moratorium on certain cryptocurrency mining operations.

The bill was passed by in the final hours of the legislative session and now heads to Gov. Kathy Hochul's desk, although she has not indicated whether or not she will sign it into law.

The bill is the first of its kind in the United States.

The moratorium would apply to "cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions."

It would also require those operations to undergo a full generic environmental impact statement review.

Proof-of-work authentication requires large amounts of electricity.

The bill has been opposed by the cryptocurrency industry, and is targeting companies that would use New York's retired, fossil fuel power plants and other industrial sites for their operations because of existing electrical infrastructure.

Upstate New York has a large number of unused facilities, which has attracted several digital currency companies. The bill would exempt those already operating or that have already submitted permits.

"We did it! Huge thank you to my partner @SenatorParker and @AndreaSCousins & @CarlHeastie for their climate leadership. Calling on @GovKathyHochul to sign this legislation & ensure we don't bring retired power plants back on line for private gain during the climate crisis," state Assemblymember Anna Kelles, who co-sponsored the bill wrote on Twitter.

"Cryptocurrency mining operations running proof-of-work authentication methods to validate blockchain transactions are an expanding industry in the State of New York," the bill reads.

"And the continued and expanded operation of cryptocurrency mining operations running proof-of-work authentication methods to validate blockchain transactions will greatly increase the amount of energy usage in the state of New York, and impact compliance with the Climate Leadership and Community Protection Act."

It also points to the potential negative impacts to water usage, water quality and other ecological concerns created by cooling water use.