In upstate New York, cryptocurrency mining causes rifts between local businesses and an enterprising corporation.

By Hayden Godfrey

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On the bucolic, trout-laden shores of New York State’s Seneca Lake, environmental activists are seeking to halt nonstop cryptocurrency mining at a lakeside facility, a cause that has sparked tensions in the region for years. Greenidge Generation, one of 26 companies owned by the Connecticut-based private equity firm Atlas Holdings, has been operating a cryptocurrency plant out of a decommissioned coal-fired power plant in Dresden, New York, since 2020, and mines the popular cryptocurrency bitcoin — all day, every day.

Bitcoin mining has caused similar unease in communities across the country, with particularly contentious operations popping up in Texas and North Dakota. As the demand for cryptocurrency trading grows, so, too, do efforts to mint (or “mine”) additional coins; in April, The New York Times identified 25 active bitcoin mining plants that each use as much or more power as 50,000 average American households.

The plant in Dresden, activists say, is pumping hundreds of thousands of tons of carbon dioxide into the air. Though a Greenidge employee contended in a January op-ed that its emissions are negligible, New York’s Department of Environmental Conservation said in June that the company did not meet the state’s emission goals and denied its air-permit renewal.

“Opponents have pressed a false choice here,” said Greenidge President Dale Irwin in a written statement to IRW. “We can grow economic opportunities and meet aggressive climate targets.”

Yvonne Taylor in front of the New York State Department of Environmental Conservation. (Photo: Kelly Marciniak)

The effort to remove Greenidge has been spearheaded by the environmental advocacy group Seneca Lake Guardian, which launched an all-out offensive against the mining operation in early 2021. The group has been working with the nonprofit Earthjustice to bring a lawsuit seeking an injunction of Greenidge’s mining.

Yvonne Taylor is a Burdett, New York, speech therapist who founded Seneca Lake Guardian in 2010. The self-described “accidental activist” disputes Greenidge’s claim that it has brought economic prosperity to the Finger Lakes and called its impact on the region “disturbing.”

“I really don’t know how much the town and county is benefiting at this point,” Taylor said. “But my concern is when they do finally go belly up, or we shut them down, the community is going to be left with the cleanup.”

Between November and February, Seneca Lake Guardian received several threatening emails, including one containing death threats directed at Taylor, from an address bearing Greenidge’s domain name, according to a source with knowledge of the situation. Taylor turned the emails over to the FBI.

The FBI’s Buffalo field office twice declined to comment on whether it is investigating the threats. In a written statement, Irwin confirmed that the emails had come from a Greenidge employee. He said the company had not been made aware of the conduct before being asked to comment for this story and, after an internal investigation, Greenidge terminated the employee in question.

“While we have strong disagreements with Seneca Lake Guardian, that is irrelevant here, as policy debates must be carried out with respect for all parties, at all times,” Irwin’s statement read, in part.

The New York State Legislature’s recent action has prevented certain types of new cryptocurrency operations from sprouting, with more legislation working its way through the Statehouse.

And although Greenidge’s air permit has been denied, it can still operate while it appeals the decision. Seneca Lake Guardian’s lawsuit claims that Greenidge’s “unpermitted discharge” of pollutants violates a host of state laws and requests an injunction on Greenidge’s emissions. Earthjustice’s Mandy DeRoche, a New York-based attorney in the organization’s clean energy program, said the legal process will be “lengthy” and hard to predict.

“Any use of a power plant that prolongs its life or increases its operations is a threat to climate progress,” DeRoche said.

Both in public speeches and one-on-one interviews, Taylor frequently references Greenidge’s stock price, which has plummeted to less than $3 a share in May 2023 from its September 2021 price of $400 a share. Greenidge was called “failed” and a “garbage scam” by members of an online subreddit discussing its stock, and it recently restructured more than $11 million in debt in an attempt to avoid bankruptcy.

In economic terms, the Greenidge plant employs 44 full-time, on-site employees, the company confirmed in March. By contrast, the agritourism industry — which has been singled out by Seneca Lake Guardian as the industry most impacted by the plant — in the nine-county Finger Lakes region employs over 8,000 locals, according to the New York State Department of Labor.

Vinny Aliperti, winemaker and owner of Billsboro Winery, has been making wine for over 20 years. He and his wife purchased the winery in 2006.
(Photo courtesy of Vinny Aliperty/Billsboro Winery)

Others in the Finger Lakes region have joined the effort to force Greenidge to cease its mining, including Vinny Aliperti, a veteran winemaker who owns Billsboro Winery in Geneva, New York. Aliperti said climate change is already impacting his winemaking and called the Greenidge plant “a disaster.”

“We don’t have any time left,” Aliperti, 53, said. “We just can’t continue belching this much CO2 in the air and continue to expect to meet any of our climate goals.”

“Mining” bitcoin is an environmentally taxing process that involves thousands of complex computations. The two ways of verifying cryptocurrency transactions — so-called “proof of work” and “proof of stake” methods — are drastically different in their environmental and computational impact. Proof of work, the older and more traditional method employed by Greenidge in its mining, is far more energy intensive, experts say.

“I’ve yet to come across a single supporter of the operation,” added Rick Rainey, 53, a longtime resident of the region and owner of the artisanal winery Forge Cellars.

Richard Rainey, managing partner of Forge Cellars in Burdett, NY. (Photo courtesy of Mountain Home Magazine)

New York lawmakers have likewise become aware of the potentially harmful environmental effects of cryptocurrency mining. Anna Kelles, a Democratic member of the New York State Assembly, introduced a bill in 2021 establishing a moratorium on certain types of cryptocurrency mining operations.

The bill, which was heavily supported by both Seneca Lake Guardian and Earthjustice, passed the Assembly and was subsequently signed into law by Gov. Kathy Hochul (D) in November of 2022. Greenidge, however, is not impacted by the bill, since it is grandfathered in, and the bill only applies to new applications for a proof of work-based operations.

Kelles framed the bill as a temporary halt — not an outright ban — on cryptocurrency mining operations, particularly those that recommission shutdown power plants in rural parts of the state. She said climate change represents an existential threat to the state and the nation, and cryptocurrency’s embryonic nature should not give it a pass for its disproportionate emissions.

“We cannot discuss this as just some new technology, as just some new industry that is being singled out and picked on,” Kelles said.

Elsewhere in the state assembly, one of Kelles’ Democratic colleagues is attempting to pass a bill establishing a task force to study cryptocurrency and blockchain technologies, a legislative effort that was vetoed by Hochul on budgetary grounds in the last legislative session.

Joshua White, assistant professor of finance at Vanderbilt University in Nashville, Tenn.

Cryptocurrency has long been a difficult area to legislate, said Josh White, a former Securities and Exchange Commission economist and current Vanderbilt University finance professor. The very nature of regulation runs counter to cryptocurrency’s original mandate, and regulatory agencies have yet to decide whether to treat digital assets as securities or commodities.

Indeed, one top Bay Area attorney said the digital asset sector is viewing regulation and legislation in two distinct eras: before and after the collapse of the cryptocurrency exchange FTX in November, which damaged the credibility of the industry. Though some remain faithful to the underlying technology, many saw the exchange’s collapse as indicative of the volatility inherent in the very idea of an unregulated, decentralized cryptocurrency.

“I know how this story ends,” White said, “because I’ve seen the penny stocks, that when there’s not protection, and there’s market manipulation, people get hurt, investors get hurt.”

Threats aside, the Greenidge conflict is but a microcosm of the friction between cryptocurrency companies and environmental activists nationwide, with similar disputes flaring up in Adel, Georgia, and Navarro County, Texas, among others.

“We can absolutely meet important climate goals, while generating new careers and harnessing all the potential of this industry, and our New York operation shows the path,” Irwin wrote.

But Taylor argued otherwise.

“These facilities come in with their slick lawyers and they make all kinds of promises about economic growth and jobs,” Taylor said, “and then, once they get in, people realize that none of those promises really truly develop.”