The move for the crypto mining ban in New York is to reduce greenhouse gases that are being emitted through the proof-of-work mechanism.
New York Senate has voted to ban crypto mining in the state. This legislation came after New York Attorney General Letitia James has advised investors to dissuade from trading in the crypto market that has been highly volatile in recent times.
The Attorney General issued a warning about recent volatility in cryptocurrency markets, which has cost investors billions of dollars. They also warned investors about potential fraud and theft in the space, which is common in crypto.
According to Attorney General James,
“Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors.”
The Terra crash, which occurred in early May, is mentioned in James’ warning. With a valuation of more than $50 billion, the project was the second-largest DeFi player after Ethereum. However, it quickly fell to a fraction of its original value.
The incident is one of the worst single project failures in crypto history, and lawmakers all over the world are using it to push for more regulation.
Terra has also been used by critics to highlight the shortcomings of crypto. About the UST stablecoin, James also warned against “unstable” stablecoins, claiming that they provide no real guarantee of stability.
New York Bans Crypto Mining
On Friday, the New York Senate passed legislation prohibiting crypto mining operations in the state, specifically those that use carbon-based energy sources.
The ban’s supporters stated that they are looking for ways to reduce the state’s carbon footprint. The ban is likely to be extended until crypto miners can use renewable energy sources more widely.
One section of the bill calls for a statewide study of the environmental impact of proof-of-work mining operations on New York’s ability to meet aggressive climate goals, which call for an 85 percent reduction in greenhouse gas emissions by 2050.
