Bitcoin mining facility ordered to shut down as new ordinance goes into effect

Quick Take

  • A facility hosting Bit Digital mining machines in Niagara Falls has been ordered to shut down due to a zoning ordinance, the company said.
  • The mayor had proposed a zoning ordinance to tackle loud noises from bitcoin mining.

A bitcoin mining facility in Niagara Falls, NY, was ordered to shut down due to a zoning ordinance issue.

The city sent a cease and desist notice to Bit Digital regarding a site owned and operated by one of its hosting partners, Blockfusion, according to a U.S. Securities and Exchange Commission filing from Friday.

The notice ordered "any cryptocurrency mining or related operations" to stop until Blockfusion complies with the city's zoning ordinance and other codes.

That ordinance had come into effect on Oct. 1, after a "related" moratorium expired on Sept. 30, Blockfusion told Bit Digital, according to the filing.

The city's mayor, Robert Restaino, said that the moratorium was meant to prevent any bitcoin facility from expanding in the area, while a proposed zoning ordinance would counter noise pollution, the ABC affiliate in Buffalo, N.Y. reported in July.

"Blockfusion has further advised that it is preparing applications for new permits based on the Ordinance’s new standards and that the permits may take several months to process. Bit Digital management continues to monitor the situation," the document says. "On October 5, 2022, Bit Digital further noticed Blockfusion that it expects it to comply with directives of the Notice."

Around 17% of Bit Digital's mining fleet is hosted at Blockfusion's Niagara Falls site — totaling 13,980  active machines as of Oct. 6.

An explosion back in May had knocked thousands of machines at the facility offline, but power had since been restored, said Bit Digital.

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