Katherine Ross

The Oregon Department of Justice is heading up a criminal investigation into a former FTX executive, though an attorney general has recused herself from the investigation.



According to a May 18 press release, the Oregon Department of Justice took over the investigation into Nishad Singh’s $500,000 donation to the Democratic Party of Oregon last October.&nbsp;



The Oregon Elections Division referred the case to the Oregon DOJ after a seven-month investigation, claiming “sufficient information” to justify the criminal investigation.



“Nishad Singh admitted under oath in the U.S. District Court for the Southern District of New York that he agreed to make political donations in his own name that were funded with money from Sam Bankman-Fried&#8217;s companies FTX and Alameda,” Elections manager Alma Whalen <a href="https://www.oregon.gov/newsroom/Pages/NewsDetail.aspx?newsid=144011">said</a> in a press release.



However, the attorney general at Oregon’s DOJ, Ellen Rosenblum, recused herself from the case.&nbsp;



A spokesperson <a href="https://oregoncapitalchronicle.com/briefs/attorney-general-rosenblum-recuses-herself-from-investigation-into-oregon-democratic-partys-cryptocurrency-donor/">told</a> the Oregon Capital Chronicle that the recusal will cover the “review, investigation or prosecution” that comes from the elections division&#8217;s referral.



The Oregon Department of Justice’s office did not immediately respond to a request for comment.&nbsp;



Rosenblum is a Democrat with a history of giving money from her campaign fund to Democrats. As the Oregon Capital Chronicle reported, both elected officials and candidates contribute to political action committees (PACs) for parties or political caucuses.&nbsp;



Deputy Attorney General Lisa Udland will lead the investigation.



Oregon does not have a campaign contribution limit, but it is a <a href="https://sos.oregon.gov/public-records-log/Lists/PRRlist/Attachments/1155/Seth%20Woolley%20Records%20Request%20-%2020-064%20Case%20Documents.pdf">felony</a> to make or accept a donation under a “false name.” As a Class C felony offense, anyone found guilty could face up to five years in prison as well as a fine of up to $125,000.



The investigation comes after state election officials fined the <a href="https://blockworks.co/news/oregon-democrat-ftx-donation">Oregon Democratic Party $35,000</a> for failing to register the donor’s identity. An investigation that led to a settlement agreement later lowered the fine amount to $15,000.



The Elections Division did not find “clear evidence” that the party knew the donor when the contribution was reported. Going forward, the Secretary of State will monitor financial disclosures from the party.



In February, the SEC <a href="https://www.sec.gov/litigation/litreleases/2023/lr25652.htm">charged</a> Singh with defrauding investors for a “multiyear scheme to defraud equity investors” in FTX.&nbsp;



Singh was also <a href="https://blockworks.co/news/ftx-execs-user-funds-alameda">one of three executives</a> who could make illicit transfers to Alameda Research to cover “financial losses.”



As Blockworks has previously reported, Singh received around $587 million in compensation out of a $3.2 billion total received by the top brass at FTX.



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Attorney General Recuses Herself From Criminal Investigation Into Former FTX Executive

Ben Strack

Bills in Arkansas and Montana that focus on crypto mining have passed in recent days, while legislation in other states remain in the ratification process.&nbsp;



While some of the proposed or passed pieces of legislation seek to protect the rights of crypto miners, others seek to put certain restrictions on companies operating in the sector.



<h2 class="wp-block-heading">Where do the bills stand and what’s in them?</h2>



Of the 7 states examined below, most have legislation that is still working its through their political systems, while one, New York, has a crypto mining bill already signed into law.



<h3 class="wp-block-heading">Arkansas&nbsp;</h3>



The Arkansas Data Centers Act of 2023, <a href="https://blockworks.co/news/arkansas-crypto-mining-bill">passed by the state’s House and Senate</a> last week, seeks to protect miners from discrimination.



The <a href="https://www.arkleg.state.ar.us/Bills/FTPDocument?path=%2FBills%2F2023R%2FPublic%2FHB1799.pdf" target="_blank" rel="noreferrer noopener">law</a> prohibits a local government from imposing requirements for crypto miners that differ from those applicable to data centers, such as rezoning areas to unfairly target such businesses. 



It also says the Arkansas Public Service Commission, which regulates the state’s utilities, is not allowed to establish “an unreasonably discriminatory rate” for crypto mining customers.



The act must be signed by Gov. Sarah Huckabee Sanders before it becomes law.



<h3 class="wp-block-heading">Montana&nbsp;</h3>



Montana’s House of Representatives <a href="https://blockworks.co/news/montana-mining-bill-passes-house">passed a similar bill</a> to Arkansas’s miner-friendly legislation on Wednesday.&nbsp;



It now heads to Gov. Greg Gianforte’s desk for final approval.&nbsp;



The bill allows industrial and at-home miners to conduct their business free from government interference, noting that crypto mining “provides positive economic value” for people and companies in the US.



Like the Arkansas law, Montana’s bill requires the government to treat crypto miners no different from data centers.&nbsp;



<h3 class="wp-block-heading">Missouri and Mississippi</h3>



Proposed laws in Missouri and Mississippi, like the bills in Arkansas and Montana, look to offer protection for crypto miners.&nbsp;&nbsp;



First proposed in January, the Missouri bill would similarly limit actions the state can take against such activities, such as prohibiting its Public Service Commission from setting discriminatory rates for a digital asset mining business.



It also looks to stop the state from prohibiting the running of nodes for crypto mining at private residences, according to a bill <a href="https://www.house.mo.gov/billtracking/bills231/sumpdf/HB0764I.pdf" target="_blank" rel="noreferrer noopener">summary</a>.



Mississippi&#8217;s proposed <a href="http://billstatus.ls.state.ms.us/documents/2023/pdf/SB/2600-2699/SB2603PS.pdf" target="_blank" rel="noreferrer noopener">law</a> brings up similar language to the Arkansas and Montana bills in that it would block the state from treating miners differently than data centers.



The Missouri bill was <a href="https://blockworks.co/news/missouri-protects-crypto-mining">passed by the state’s House</a> on March 7, but appears to have stalled.&nbsp;



The Mississippi bill passed the state Senate in February but <a href="http://billstatus.ls.state.ms.us/2023/pdf/votes/house/0650013.pdf" target="_blank" rel="noreferrer noopener">failed</a> to pass during a House of Representatives vote last month. 



<h3 class="wp-block-heading">Texas</h3>



Texas Senate Bill 1751 would prohibit tax abatements on certain bitcoin mining property and set limits on miners’ participation in demand response programs.&nbsp;



The type of demand response the Texas bill would impact is ancillary services — where bitcoin miners, in this case, sell the right to the Electric Reliability Council of Texas (ERCOT) to curtail miner load as it sees fit to balance the grid.



Riot Platforms, a miner operating in the state, <a href="https://blockworks.co/news/riot-dislikes-texas-mining-bill">called the bill “misguided”</a> and argued that it would lead to a more expensive and less reliable energy grid.&nbsp;



In a Wednesday <a href="https://mobile.twitter.com/SatoshiActFund/status/1646344816576593920" target="_blank" rel="noreferrer noopener">letter</a> to Lieutenant Governor Dan Patrick, leaders of the Chamber of Digital Commerce, the Texas Blockchain Council and the Satoshi Action Fund, wrote that the bill  would have “devastating impacts on Texas’ leadership role in the digital economy and could have unintended consequences on the state’s energy security.” 



Introduced last month, the Texas Senate voted to approve the bill on Wednesday. The bill now heads to the state’s House of Representatives.



Texas Blockchain Council President Lee Bratcher told Blockworks he believes Texas Senate Bill 1751 will “struggle to gain traction” in the House due to its “anti-competitive nature.”&nbsp;&nbsp;



Fred Thiel, CEO of crypto miner Marathon Digital, previously said he didn’t think the law would pass the House, noting he expects “sane heads will prevail.”&nbsp;



Analysts at Compass Point Research &amp; Trading wrote in an April 10 research note that even if the proposal passes the Senate and House, they believe Texas Gov. Greg Abbott would veto it.



<h3 class="wp-block-heading">Oregon</h3>



<a href="https://blockworks.co/news/oregon-weighing-crypto-miner-carbon-crackdown">An Oregon bill</a> introduced in January would require facilities with high energy use, including those involved in crypto mining, to reduce greenhouse gas emissions.



Amazon had lobbied against the bill from the start of discussions, the Washington Post <a href="https://www.washingtonpost.com/technology/2023/04/04/amazon-climate-energy-fuel-oregon/?email=467cb6399cb7df64551775e431052b43a775c749&amp;emaila=12a6d4d069cd56cfddaa391c24eb7042&amp;emailb=054528e7403871c79f668e49dd3c44b1ec00c7f611bf9388f76bb2324d6ca5f3&amp;utm_source=Sailthru&amp;utm_medium=email&amp;utm_campaign=04.05.23%20Energy%20%26%20Environment%20JB" target="_blank" rel="noreferrer noopener">reported</a> earlier this month, essentially killing it.



The tech giant “successfully nurtured fear that our energy requirements would drive away the development of data centers,” Oregon state Rep. Pam Marsh told the news outlet.



The bill would have set up specific emissions reduction targets in the years ahead — such as lowering emissions by 60% below their baseline current levels by 2027 — and required operators of such facilities to provide proof of compliance via annual reports to the Department of Environmental Quality.&nbsp;&nbsp;



Violations were to result in a $12,000 penalty per megawatt-hour in violation for each day not in compliance.



A public hearing related to the proposal was held on March 20. Those set to <a href="https://olis.oregonlegislature.gov/liz/2023R1/Downloads/CommitteeMeetingDocument/266037" target="_blank" rel="noreferrer noopener">testify</a> in support included leaders from Southern Oregon Climate Action Now and the NW Energy Coalition, while people from the Economic Development for Central Oregon and the Data Center Coalition were slated to speak in opposition of the measure.



<h3 class="wp-block-heading">New York</h3>



A <a href="https://blockworks.co/news/new-york-passes-bill-restricting-carbon-fueled-crypto-mining-operations">crypto mining-related bill in New York</a> is unique in that it is no longer pending.&nbsp;



The <a href="https://www.nysenate.gov/legislation/bills/2021/A7389" target="_blank" rel="noreferrer noopener">law</a>, which paused crypto mining operations that use proof-of-work methods to validate blockchain transactions, was signed by Gov. Kathy Hochul last November. 



The bill prevents the state from approving such operations that depend on carbon-based power for two years, noting that such crypto miners “impact compliance” with New York’s Climate Leadership and Community Protection Act.



Kristin Smith, executive director of Blockchain Association, had said before it was signed that the bill would have “a significant chilling effect on crypto mining in the state,” adding that it could send hundreds of jobs to other states.



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In US Crypto Mining Regulation, Where do the States Stand?

Sebastian Sinclair

Cryptocurrency miners and related entities could soon be required to adhere to an uncommonly stringent set of restrictions around their energy usage.&nbsp;



The measures — largely an outlier in the US — stem from a bill submitted to Oregon’s legislature on Wednesday. New York has been one of a handful of other states to <a href="https://blockworks.co/news/new-york-passes-bill-restricting-carbon-fueled-crypto-mining-operations" target="_blank" rel="noreferrer noopener">impose strict standards</a> on miners of bitcoin and other proof-of-work cryptoassets. 



Sponsored by Rep. Pam Marsh, Sen. Michael Dembrow and Rep. Mark Gamba, <a href="https://olis.oregonlegislature.gov/liz/2023R1/Downloads/MeasureDocument/HB2816/Introduced">House Bill 2816</a> aims to curb the carbon output of such “high energy use” facilities — with the goal of tamping down emissions by 60% below their baseline current levels by 2027.



The proposed new baseline is set at 0.428 metric tons of carbon dioxide equivalent per megawatt-hour. It would mandate those crypto companies to cut their emissions according to the following timeline: 80% by 2030; 90% by 2035; and 100% five years after that.



Failure to comply, each step of the way, would result in civil penalties of some $12,000 per megawatt-hour for each successive day not in compliance.&nbsp;



House Bill 2816 is meant to work in conjunction with another bill passed two years ago in Oregeon’s legislature, House Bill 2021. That bill also establishes clean energy targets toward 100% renewable energy by 2040, while bolstering existing guidelines.



“This is a bill that aims to bring the very largest of our energy and consumptive operations including crypto miners and data centers in line with the Senate and House Bill 2021,” Marsh told Blockworks.



The legislation currently applies to the state&#8217;s two largest electricity providers, together covering roughly three-quarters of the northwestern state. Even so, there’s still a significant portion of Oregon that was not covered under the previous legislation, according to Marsh.



Oregon was <a href="https://news.bitcoin.com/oregons-cheap-hydropower-attracts-a-swarm-of-bitcoin-miners/" target="_blank" rel="noreferrer noopener">once viewed</a> as a crypto mining haven. That standing was in part due to its hydropower capabilities powered by the Columbia River — back then, that renewable energy production cost 3 to 4 cents per kilowatt-hour, significantly less than other states.   



Rising energy costs and a shift in overall sentiment in the sector, as well as major projects moving away from heavy energy-intensive proof-of-work consensus mechanisms, have resulted in less demand.



Both miners and data centers have come under fire in recent years over their excessive <a href="https://blockworks.co/news/white-house-criticizes-proof-of-work-crypto-mining" target="_blank" rel="noreferrer noopener">energy draw</a> and subsequent high levels of greenhouse gas emissions. 



An <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/" target="_blank" rel="noreferrer noopener">executive order</a> on cryptocurrencies issued by the Biden administration last year emphasized that their underlying blockchain technology has contributed in no small measure to rising greenhouse gas emissions.



The bill, which has just hit the legislature’s table, is yet to be assigned to a committee and has not yet faced a hearing. That process, according to Marsh, could take two to three weeks.



Casey Wagner contributed reporting.



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