- Crypto mining businesses face scrutiny in the Empire state
- Residents of the New York state have raised alarms on the overuse of water and electricity in powering these operations
- If the proposed bill is approved, it could go into effect in January 2027
Amid gradual but consistent growth in electricity prices, the state of New York in the U.S. is mulling over measures to regulate the crypto mining industry. This week, state senator Liz Krueger has extended a bill proposing excise taxes on the electricity power used by crypto mining operators within the state.
The bill proposes a tier-system to assess the tax payment bracket for crypto miners. Operators consuming 2.26 million to 5 million kilowatt-hours (kWh) annually could see a tax of 2 cents per kWh, the bill proposes. The maximum usage of power for crypto mining, as per this bill, has been clocked at over 20 million kWh per year — that will fetch the miners tax payment of 5 cents per kWh.
Those mining companies that are utilizing less than or upto 2.25 million kilowatt-hours (kWh) in energy have been proposed to be exempted from this excise tax under the bill.
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Additionally, crypto miners powering their operations using renewable energy will not be liable to pay the excise taxes.
Kruger has said that the proceeds collected from this step would be utilized to assist customers enrolled in the energy affordability programmes in the state.
The bill will now be up for discussion among policy makers. If approved, it would go into effect on January 1, 2027.
The New York state presently houses four of the largest crypto mining businesses in the U.S. In total, the state reportedly has 11 crypto mining companies that collectively require an energy demand of 7.7 terawatt hours – enough to annually power over 100 million homes for seven hours.
If this bill materializes, it could significantly impact the businesses of crypto miners as their profit margins could narrow down. Miners could also have to consider moving out of the region to set up operations in other jurisdictions where such a tax would not burn a hole in their pockets.
As per a CoinTelegraph report, energy prices have risen to $0.08 per kWh. Owing to this development, mining giant TeraWulf registered a loss of $61.4 million in the first quarter of 2025.
In the past, the state communities have raised red flags against the massive power demand by crypto miners citing electricity crisis, water usage, and detrimental effects to the environment.
Earlier in 2022, the New York Assembly had briefly started denying approvals for crypto mining businesses that were using non-renewable energy to power their operations.
The process of mining is required to mint tokens for proof-of-work (PoW) crypto assets like Bitcoin. Miners or network validators have to solve complex algorithms on advanced computers to add new blocks to these blockchains and mint tokens in exchange for rewards.
