The plant opening northeast of Niagara Falls this month, in Somerset, N.Y., is part of a $550 million project by Terawulf, a Bitcoin mining company. The project also includes a proposed 150-megawatt data center at a former coal plant on Lake Cayuga in the Finger Lakes.
Paul Prager, Terawulf’s chief executive, said the Somerset plant would make use of hydroelectric power salvaged from the falls that is otherwise difficult to send to other locations because of grid congestion.
And because the plant would comply with state environmental rules and not cause air pollution, he said, “we look at regulations as a really good thing.”
But despite requiring companies that engage in many aspects of Bitcoin activity, including trading the currency, to obtain a license, New York places no restrictions on mining.
Some municipalities, including Plattsburgh and Massena, two early Bitcoin-mining destinations near the Canadian border, have resorted to moratoriums on the practice.
The bans have since been lifted, but some lawmakers want to make New York one of the first states to prohibit certain types of Bitcoin mining. In June, the State Senate approved a bill that would have imposed a statewide moratorium on some fossil-fuel-powered mining; the legislation died in the Assembly.
“It has been easy for these companies to fly under the radar because the whole industry is confusing to understand, at first,” said Assemblywoman Anna R. Kelles, a Democrat who represents the Ithaca area and sponsored the bill. “It’s too new of an industry not to be regulated federally or statewide in respect to greenhouse gas emission and the effect on water and air.” (Ms. Kelles said she planned to revive the bill next year.)