MASSENA — The town of Massena will host a public hearing during the March 20 board meeting to discuss crypto currency mining operation regulations.
Town Attorney Eric Gustafson previously told board members the new regulations are nearly finalized and will be ready for review well before the public hearing.
Former Councilors Debra Willer and Francis Carvel, who worked with Gustafson over the course of the last several months to draft the regulations, continued to assist with the process following the end of their terms in January.
Town Supervisor Sue Bellor thanked both for their dedication to the town, saying their hard work in assisting with the crafting of regulations was appreciated by the board.
Town officials have long maintained a moratorium on crypto operations in the town, continually extending it for the last few years. The latest extension was implemented in December, as councilors opted to extend the moratorium for six months. That vote, like all others, was poised unanimously with a 5-0 vote.
Officials previously said the moratorium in place would give the town time to craft regulations while also waiting to see what state officials would do to regulate such operations.
State officials approved a state-wide two-year moratorium on crypto operations in Nov. 2022 while legislators crafted regulations with consultations from members of the financial industry, as well as environmental organizations and departments.
To date, North Country Collocation Services has been operating at the former Alcoa East plant, though the moratorium meant that the operation was unable to expand.
Under the terms of the moratorium, existing operations are only allowed to operate to the extent that was approved by the town planning board prior to the enactment of the moratorium.
NCCS operates and maintains equipment for crypto operations, as well as other data mining companies.
Many of the other operations that have come through Massena are themselves proof-of-work operations that use a blockchain-based algorithm to mine for crypto currencies such as Bitcoin and Ethereum.
Crypto operations have been a mixed bag in recent years with many residents opposing such operations in town. Many argue the facilities are an environmental hazard while offering few jobs to the local economy.
Some have been labeled as an eye sore, including one operation that utilizes sea box containers for the actual structure. Code enforcement, town officials and Town Attorney Eric Gustafson have taken steps in recent years to attempt to put an end to the use of such containers with crypto mining companies.
Another company that was approved prior to the moratorium, albeit on a very small scale, attempted to circumvent the planning board multiple times as councilors sought to extend the moratorium.
That company, Block Scheme LLC, is owned by Russian national Sergey Karpenko.
Karpenko had previously received approval for a much smaller operation prior to the moratorium, however he soon changed his tune and wanted to expand the operation significantly after the moratorium went into effect.
Officials quickly shot down the plan, saying Karpenko was describing a change that required site plan approval, a process that can’t begin until the moratorium is over.
Over the course of multiple public hearings Karpenko argued his operation was not a crypto mining operation but rather a data mining operation. Planning board members quickly countered the argument, saying crypto and data are essentially the same thing.
As a result, village officials defined crypto mining as “the commercial process by which cryptocurrency transactions are verified and added to the public ledger, known as the block chain, and also the means through which new units of cryptocurrencies are released, through the use of server farms employing data processing equipment.”
Server farms are also defined as “three or more interconnected computers housed together in a single facility whose primary function is to perform cryptocurrency mining or associated data processing.”
With regulations seemingly finalized, town officials will soon present the new regulations to residents, who will then have the opportunity to voice their opinions during the public hearing.
The town board will meet on March 20 at 4:30 p.m.
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