The U.S. state of Arkansas joined Montana and Texas this year in proposing legislation to regulate Bitcoin mining while also offering legal protections to companies operating such businesses, a stance in contrast to national regulators, such as the Securities and Exchange Commission (SEC), that have fined and filed lawsuits against companies running cryptocurrency exchanges.
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Fast facts
- The state’s bitcoin bill, known as the Data Centers Act of 2023, has passed in both the Arkansas House of Representatives and Senate and now awaits the governor’s approval. The bill, proposed by Republican Senator Joshua Bryant on March 30, seeks to protect miners from discriminatory regulations and taxes with clearer guidelines.
- It states that crypto miners will be required “to pay applicable taxes and government fees in acceptable forms of currency and operate in a manner that causes no stress on an electric public utility’s generation capabilities or transmission network.”
- Under the legislation, crypto miners will have the same rights as data centers, which the state recognizes as a value to the local economy.
- The move in Arkansas reflects a similar action in Montana in February when the state Senate passed a bill to offer legal protections to cryptocurrency miners, such as prevention of discriminatory electricity rates.
- The picture in Texas is more mixed, with legislation introduced on April 4 that would eliminate some incentives for crypto miners in the state, while in March, the state introduced a bill in support of Bitcoin mining, which is still pending at the House Committee on State Affairs.
- Meanwhile, U.S. regulators such as the SEC and the Commodity Futures Trading Commission have fined and filed lawsuits against crypto trading platforms, such as Kraken and Binance, claiming they lack legal approvals to sell some of their services.
- Congressman Tom Emmer of the Republican Party has criticized SEC chair Gary Gensler during a podcast appearance, saying Gensler is “blindly spraying the crypto community with enforcement actions while completely missing the truly bad actors.”
- The administration of President Joe Biden has also proposed an excise tax on crypto miners that equals 30 percent of the cost of electricity they use.
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