January 27, 2023

Mayor Adams takes supportive tone after Hochul signs bill restricting crypto mining

Mayor Adams took a supportive if somewhat cryptic tone after Gov. Hochul signed legislation this week limiting some cryptocurrency mining in the state, casting the new law as an acceptable step toward smart tech policy.

Adams, a vocal crypto booster, said he maintains his focus on establishing New York as a crypto hub. But he said that goal can be balanced with statewide efforts to curb environmental costs associated with some forms of crypto production.

In June, Adams told Crain’s that he intended to ask his ally Gov. Hochul to veto the bill. Hochul, a Democrat, still authorized the measure as part of a flurry of 19 bills she enacted Tuesday.

New York Gov.  Kathy Hochul, left, and New York City Mayor Eric Adams.

“I shared my thoughts,” Adams, a Democrat, told the Daily News on Friday. “This is Albany. A lot of the successful things that were done took layers and conversations to get to the destination we want.”

“That’s the way our government works,” added Adams, a former state senator. “I’m going to work with the legislators who are in support and those who have concerns, and I believe we are going to come to a great meeting place.”

Hochul’s signature authorized a broad two-year statewide pause on new permitting for cryptocurrency production at fossil-fuel powered facilties that “mine” crypto currency on powerful computers with complicated algorithms.

The new law makes New York the first state to restrict mining of energy-sapping cryptocurrency.

The governor handled the legislation carefully. She took no position on it during her closer-than-expected governor’s race against Rep. Lee Zeldin of Long Island, perhaps wary of giving the Republican an opening to present her as anti-business.

Adams campaigned with Hochul during the race, rallying with her in his power base of southeast Queens and stumping for her repeatedly in campaign’s final days. He attended her election night victory party, as she had at his in November, though he did not appear onstage.

Mayors of New York City have always quarreled with New York governors, and much has been made of the publicly chummy relationship between Hochul and Adams. Skeptics have wondered if it will last.

In a memo explaining her decision to sign the crypto law, Hochul pledged to “ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of the environment.”

Environmentalists decry the vast amount of energy required to produce cryptocurrencies like Bitcoin. Other forms of crypto cash do not have as large footprints.

The New York law does not touch crypto mining operations that operate with electricity from the electric grid, and Hochul suggested the new law could spur crypto development in hydroelectric facilities.

Still, even before Hochul signed the measure, New York was seen as one of the tougher states to establish crypto businesses.

Adams has sought to shift that impression. He spoke out frequently in support of crypto before taking office, and converted his first three paychecks as mayor into Bitcoin and Ethereum, the two largest cryptocurrencies.

He has maintained his stance even as the value of Bitcoin has plummeted, and amid the downfall of the FTX cryptocurrency exchange, which appears to have cost investors billions.

Adams has argued that crypto is part of a broader financial frontier that New York must conquer.

“Now, there’s aspects of this bill that people didn’t agree with,” Adams said. “I know Albany. Let’s go back. Let’s look at them.”

He pointed to the massive Micron computer chip plant planned to be built near Syracuse as an example of how to balance economic and environmental concerns. New York secured Micron’s investment through an eco-friendly tax credit bill signed by Hochul.

“We must become a welcoming place for all technology. And crypto is part of the overall technology we’re looking at,” Adams said. “The question is: how do we make smart choices so that New York City — and America — is a leader in this new technology.”

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