Timothy Morano
Oct 03, 2025 09:30
New York cryptocurrency miners may face an exodus as lawmakers propose aggressive legislation targeting their high electricity usage.
New York cryptocurrency miners face a potential exodus as state lawmakers unveil aggressive legislation targeting the industry’s massive electricity consumption with punitive taxes that could reach 5 cents per kilowatt-hour.
Senator Liz Krueger introduced Senate Bill 8518 on October 1, establishing a tiered excise tax system that specifically targets digital asset mining operations using proof-of-work validation methods. The legislation, co-sponsored by Senator Andrew Gounardes, represents the latest effort by New York to crack down on an industry already struggling with razor-thin profit margins.
Tiered Tax Structure Threatens Profitability
The proposed tax structure escalates dramatically based on annual energy consumption. Mining operations using up to 2.25 million kilowatt-hours annually would face no additional taxes, but the burden increases sharply for larger facilities. Operations consuming between 2.25 million and 5 million kWh would pay 2 cents per kWh, while those using 5-10 million kWh face a 3-cent levy.
The heaviest penalties target industrial-scale miners, with facilities consuming 10-20 million kWh annually facing 4 cents per kWh, and operations exceeding 20 million kWh hit with the maximum 5-cent rate.
“This tax structure could fundamentally reshape the competitive landscape for Bitcoin mining in New York,” said Michael Richardson, senior analyst at Digital Asset Research Group. “When you’re already operating on margins measured in single-digit percentages, an additional 5 cents per kWh can be the difference between profitability and bankruptcy.”
Renewable Energy Carve-Out Creates Winners and Losers
The legislation includes a critical exemption for mining operations powered entirely by renewable energy sources, as defined by New York’s public service law. This provision could create a two-tiered market where companies with access to clean energy infrastructure gain significant competitive advantages.
The renewable exemption builds on New York’s previous approach during a two-year mining moratorium signed by Governor Kathy Hochul in 2022, which allowed clean energy miners to continue operations while fossil fuel-powered facilities faced restrictions. That moratorium expired in 2024, paving the way for this new tax-based approach.
“The renewable exemption is smart policy that incentivizes clean energy adoption while still addressing concerns about grid strain,” explained Sarah Chen, energy policy director at the Northeast Clean Tech Institute. “However, it effectively creates two classes of miners – those with renewable access and those without.”
Industry Under Financial Pressure
The timing of the proposed tax coincides with mounting financial pressures across the mining industry. The median cost of mining a single Bitcoin surpassed $70,000 in the second quarter of 2025, driven by increasing network difficulty and higher energy costs. Average energy prices in early 2025 reached $0.08 per kWh, contributing to significant losses for major operators like TeraWulf, which reported a $61.4 million loss in the first quarter.
Revenue from the new excise tax would be directed toward utility customers enrolled in Energy Affordability Programs, according to the bill’s provisions. This funding mechanism positions the legislation as both an environmental measure and a consumer protection initiative.
Broader Regulatory Implications
The New York proposal reflects growing regulatory scrutiny of cryptocurrency mining’s environmental impact across multiple jurisdictions. While artificial intelligence data centers consume comparable or greater amounts of electricity, lawmakers have specifically targeted proof-of-work mining operations due to concerns about their energy intensity and carbon footprint.
Industry observers expect the legislation could accelerate migration of mining operations to states with more favorable regulatory environments and lower energy costs. Texas, Wyoming, and other crypto-friendly jurisdictions have actively courted Bitcoin miners with supportive policies and abundant renewable energy resources.
“New York is essentially telling large-scale miners that they’re not welcome unless they can afford premium renewable energy infrastructure,” said David Kumar, managing partner at Blockchain Capital Strategies. “This could drive consolidation in the industry, with only the most capitalized players able to build the necessary clean energy partnerships.”
The bill currently sits in the Senate Rules Committee, with industry groups mobilizing opposition efforts while environmental advocates push for swift passage. If enacted, the legislation would position New York among the most restrictive jurisdictions globally for cryptocurrency mining operations.
Image source: Shutterstock