The damage done by crypto mines
You know crypto exists in the world, but it may not be part of your world. Unless fraudster Sam Friedman’s arrest is on every news source, all matters crypto are completely off my radar.
This was the case for Tami Hornbeck of DeWitt, a small town in the Arkansas Delta, a rice-farming community where people like to fish and hunt, especially for ducks. I have a friend who loves to hunt there. When he’s in DeWitt he visits 420 and Turnrow Coffee on the downtown square in a renovated historic building owned by Ms. Hornbeck.
Her family has lived in DeWitt for generations, running Hornbeck Seed Company, started in 1981, which they sold in 2011. Her two sons are in agriculture. The family owns a lodge for duck hunting and guiding.
In late September 2023 Jeremy Cox, a friend of Tami’s, posted a video to Facebook of what a crypto site is. He’s a neighbor to the crypto mine coming into DeWitt. The video was alarming. Tami began to hear more about the crypto mine from others. Apparently the county judge and quorum court learned about it in the summer. They were told it would boost the local economy, provide jobs, and stabilize the electric grid and they believed this, so they agreed to it. Vague certified letters went out to nearby landowners that informed them of the impending construction.
As townspeople became worried, a meeting was called to discuss what was happening. DeWittians packed the courthouse. Tami and others had done research and asked a lot of questions. But there didn’t appear to be many answers. The whole thing seemed shrouded in secrecy.
There had been a county ordinance passed in July—at the recommendation of the Arkansas Association of Counties—to abate the noise a crypto mine causes. Everyone hoped that would be enough to protect landowners and wildlife, but it did nothing to heal the eyesore now forming on the drive into town.
When groundwork started for the mine, there were no signs, regulations, permits usually seen at a construction site. Tami knew all about ADEQ regulations because she and her family had to comply with them for one of their businesses, converting soybeans into biodiesel. She says they were constantly monitored. But the county judge told Tami the crypto company didn’t have to do any of that. All it was required to do was get a 911 address and proof it was not in a flood plain.
This was because of a law passed in the last hour of the last day of last year’s legislative session: Act 851. Like so many bills that come through our Capitol, it was written by an out-ofstate firm and likely not read by most of our lawmakers. The representative for DeWitt’s district, Jeremiah Moore, voted for it, as did virtually everyone else. Stephanie Flowers, one of DeWitt’s senators, was the lone voice who said what they all should have been saying, which was that she wasn’t voting for something she didn’t understand and didn’t know how it would impact Arkansans.
The townspeople formed a committee and Tami agreed to lead. They began to hold weekly meetings to share information. Among their concerns were: How much electricity would this crypto mine require? What about water? Because a crypto mine is essentially thousands of computers that run 24/7 and have to be constantly cooled by fans, in summer the fans aren’t enough. Water must be added. How much water? And where would the wastewater go? Into the LaGrue Bayou, and then the White River? How might this affect natural resources, and consequently the hunting and fishing central to the DeWittian way of life, including its agri-driven economy?
Under pressure from the public, local authorities amended the original ordinance demanding more abatement for noise in October. Jones Digital, owners of the crypto mine, filed suit against the county ordinance, saying it violates Act 851. And it does.
Turns out the act is designed to protect crypto miners against such ordinances passed by the people in whose backyards they choose to set up shop. The playbook is to move into small towns that have no resources to fight against them. They use the existing electric grid—in this case receiving a special rate from Entergy because they use so much—and water sources, with basically no oversight.
Even though the act was sold to legislators under the guise that crypto mines would create jobs and tax revenue in small towns, they do neither thing. Tami told me they don’t contribute to the good of the community. But the electricity required for the mine has potential to shut their grid down, causing blackouts, and raising costs for locals because of new demand. The noise—a whining whir of huge fans around the clock—is maddening. But a judge ruled in favor of Jones Digital based on Act 851. That was November.
The next month, Representative Moore, head now more in the game after outcry from voters, had ADEQ come inspect the crypto site. Jones Digital was found in violation of a number of environmental requirements, among them that several permits were missing, erosion controls were not in place, no water source reported, nor was there a plan for solid waste disposal. To date there has been no remedy, no enforcement of penalties by ADEQ.
The attorney general’s office opened an investigation into crypto mines, questioning whether they violate Act 636, a state law that bars businesses controlled by Chinese nationals from owning land. The governor talks tough about enforcement of that act. As of this printing there are still no results from that investigation related to Jones Digital and the Dewitt crypto mining operation. Which is interesting. Because Jones Digital is majority Chinese-owned, as are most of these crypto operations popping up around the country, though they run through shell companies that make them look American.
Although Arkansas and Montana have passed legislation giving them free rein so far, it is in the pipeline for over a dozen more states.
This is “the way the sausage is made” as someone told me once when I was running for office, though I didn’t want to believe him. It’s rotten sausage but it’s the one our Legislature uses over and over, whether it is an omnibus bill created by ALEC to gut public education, distributed to legislatures in Arizona, Florida, Idaho, Iowa, and beyond—and fed to us in Arkansas in the form of LEARNS—or a seemingly insignificant bill that flies through on the last day of session under the radar. Our laws aren’t being made by Arkansans for Arkansans. They are served up by lobbyists at the behest of big money that invests in the campaigns of our leaders who in turn do their bidding.
Act 851 originated from the Satoshi Action Fund, a nonprofit advocacy group based in Mississippi. Its founder, Mandy Gunasekara, worked in the Trump administration alongside our governor. Under this act, a crypto company can come into a community anywhere in Arkansas and create noise that drives everyone crazy, harms wildlife, and devalues property.
And they are. The current map shows 18 mine sites in the state. In DeWitt, there are non-English speaking employees patrolling the mine with guns and dogs. When local people did the most American thing possible and stood up for their town? Jones Digital sued the county judge, county attorney, and sheriff. They, along with Tami and the other committee members, a private citizen, and Representative Moore had their entire lives subpoenaed: any type of communication, phone records, the committee’s financial records. They haven’t done anything wrong, but it is scary, and it is taking over their lives. Just like the crypto mine is taking over their town.