It is the first time that the crypto industry has flexed its growing lobbying might at the US state level.
On May 2, representatives of the national crypto lobby and leaders of New York’s state legislature appeared at New York’s state capitol building in Albany to decry a moratorium on cryptocurrency mining that has passed the Assembly, the legislature’s lower chamber. In the state Senate, the bill is currently awaiting consideration before the Environmental Conservation Committee.
The public event was a show of force that saw participation from Democratic Assembly Member Clyde Vanel and Senator Jeremy Cooney, featuring coordination from the Blockchain Association, a DC-based trade association with a long history of federal lobbying.
In sum, it is a political fight that has taken on major significance for the crypto industry and its future approach to state governments.
“If we are able to win in New York that will seriously make other states think twice before engaging,” Kristin Smith, executive director of the Blockchain Association, told The Block. “If we succeed it will convince other states that it’s not worth their time.”
In March, the Blockchain Association hired John Olsen, an Albany-based lobbyist. It is the association’s first state outpost.
Reflecting broader trends nationally, the crypto industry is putting issues of equity at the center of the fight in New York.
Both in hiring and funding, the industry has increasingly emphasized its engagement with minority groups and crypto’s capacity to expand financial access. This approach holds true in the current fight.
Cleve Mesidor is a longtime advisor to the Blockchain Association who launched a 501c3 organization called the Blockchain Foundation in March. She appeared in Albany to promote the role of Black and Hispanic communities in the blockchain industry. Mesidor also leads the National Policy Network of Women of Color in Blockchain.
In his speech, Assemblymember Vanel emphasized the expanded salaries crypto mining could offer trade professionals. He said of a trip to mining operations upstate:
“I thought ‘how could cryptocurrency miners hire people? These are just computers doing stuff.’ When I went upstate and saw some of these jobs, when I saw people without advanced degrees actually doing advanced computer networking systems, I was blown away. I was also blown away by the amount of salary these folks were getting.”
Also speaking on crypto mining’s job production was Addie Jenne, a former Democratic Assemblymember and current lobbyist for the International Brotherhood of Electrical Workers. The IBEW was critical to stonewalling an earlier version of the moratorium last summer.
Assemblymember Anna Kelles is the author and most public proponent of the bill. Speaking with The Block, Kelles was skeptical. “There’s been continual information coming out that this industry creates very little jobs,” she said.
Greenidge Generation, one of the most visible miners in New York, reported in February that it had expanded full-time staff from 22 to 48 over the course of the previous two years. “The average salaries at the Dresden facility are more than twice the average wage in Yates County,” the company’s release said.
The 2020 US census put Yates County’s per capita income at just over $28,000. Greenidge did not respond to several requests for comment.
Expanded war chest
Meanwhile, local miners have also been expanding their lobbying efforts, both within New York and at the federal level.
Greenidge Generation’s conversion of an old power plant into a major crypto mine in Dresden, NY made it the most visible company in the fight over mining. According to state disclosures, Greenidge reported spending $181,000 on lobbying in New York last year.
As of February, Greenidge also took on a contract with Brownstein Hyatt Farber Schreck to lobby federally, a program that cost it $40,000 in the first quarter of 2022.
Federally, Marathon Digital, another miner, registered a $30,000 per quarter contract with Diroma Eck & Co. Other miners like Riot and Coinmint also reported lobbying expenditures.
To other miners less invested in New York, the concern over the state’s activities appears overwrought.
“I”m in a minority where I don’t think it’s a big deal at all,” says John Warren of the moratorium. Warren is CEO of Gem Mining, which has operations throughout the South and the Great Plains — but not New York.
Correction: An earlier version of this article incorrectly identified Marathon Power as a crypto miner, confusing the firm with Marathon Digital, which is a crypto miner. Marathon Power reported lobbying expenditures in New York state, while Marathon Digital reported federal lobbying. The article has been updated accordingly.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.