Lawmakers Target Mining’s Energy Costs
New York legislators have ignited a new battle with the crypto mining industry by introducing a bill that would impose a tiered excise tax on Bitcoin miners. Spearheaded by Senator Liz Krueger and Assemblymember Anna Kelles, the legislation, known as Senate Bill S8518, seeks to make miners pay for their high electricity consumption while channeling funds into the state’s Energy Affordability programs.
The measure reflects growing concern that mining’s energy-hungry operations are raising bills for households and small businesses across the state, despite offering limited economic benefits in return.
A Tax That Rewards Clean Energy
The bill introduces a tiered structure, exempting smaller operators that consume up to 2.25 million kWh annually. Mining facilities using between 2.26 million and 5 million kWh would face a 2 cent per kWh charge, with rates increasing up to 5 cents per kWh for those consuming more than 20 million kWh per year.
Crucially, operations powered by 100% renewable energy would be exempt from the excise tax. Supporters argue this carve-out creates an incentive for miners to shift to sustainable energy sources, potentially setting a precedent for other states grappling with the same issue.
Still, critics note the bill targets only crypto miners, leaving out artificial intelligence companies and data centers that already consume more electricity than Bitcoin mining. For miners operating on thin margins, the proposed tax could force relocation to more favorable jurisdictions.
Fallout After Adams’ Exit
The proposed legislation comes in the wake of New York City Mayor Eric Adams’ sudden decision not to seek reelection. Adams, who branded himself the “Bitcoin Mayor,” had taken part of his salary in Bitcoin, fought against the state’s BitLicense regime, and promoted New York as the “crypto capital” of the world.
His departure underscores a shift in political climate. While Adams embraced blockchain integration into education, finance, and record-keeping, state lawmakers are now pushing tougher restrictions that could deter crypto innovation within New York’s borders.
Critics Call Out Hypocrisy
Despite its environmental framing, the bill has drawn criticism for ignoring AI’s growing energy demands. Industry players warn that singling out miners creates an uneven regulatory landscape that punishes one sector while sparing others with similar or larger footprints.
New York’s Long Crypto Battle
This bill comes a year after the expiration of New York’s two-year moratorium on fossil fuel–driven proof-of-work mining, the first such restriction in the U.S. That ban halted new permits for plants using carbon fuels to power mining directly, a move widely seen as anti-crypto regulation.
Meanwhile, the state continues to enforce its controversial BitLicense, which remains a significant barrier for startups, often costing more than $100,000 and taking years to obtain. While the excise tax could raise funds for energy relief, it also risks accelerating an exodus of miners to more welcoming states like Texas and Wyoming.
