City of Niagara Falls Forces Blockfusion Bitcoin Miner to Shut Down Operations

Bitcoin miner Blockfusion has been ordered to shut down its operations due to violations of the local area’s zoning code.

Crypto mining firm Bit Digital hosts 17% of its machines at Blockfusion mining facility in Niagara Falls. On Tuesday, Bit Digital said it received a cease-and-desist order from the City of Niagara Falls in New York about issues revolving around mining activities in the facility.

The order calls for Blockfusion to halt all cryptocurrency mining or related operations at the facility until it complies with the city's zoning ordinance (laws).

Bit Digital said it received the notice just four days after a moratorium on the industry was lifted on September 30. The company said it is preparing applications for new permits, which may take several months to process.

The City of Niagara Falls is the latest community to voice frustrations about crypto mining facilities. In July, residents raised concerns that cryptocurrency mining facilities have been disrupting their daily lives in terms of disturbing noises and issues associated with the quality of life and the environment, and demanded city leaders to take action.

The city currently hosts two different mining facilities, three miles apart. There is a mining facility on Buffalo Avenue owned by U.S. Bitcoin Corporation while the other one located at Frontier Avenue, which was bought by the company Blockfusion in 2019.

In December of 2021, after complaints began to pile up, the city imposed a 180-day moratorium on Bitcoin operations while trying to sort out ordinances, community complaints, and zoning issues. That moratorium was extended and recently expired on September 30.

The state of New York recently passed a similar measure. In June, the state passed a bill seeking to ban Bitcoin mining operations that run on carbon-based power sources. The New York bill calls for a two-year moratorium on certain cryptocurrency mining operations that use proof-of-work consensus mechanisms to validate blockchain transactions.

The bill is now on the desk of Governor Kathy Hochul, who could sign it into law or veto it. If the governor signs the bill, it would make New York the first state in the country to ban blockchain technology infrastructure.

According to industry observers, if the bill is signed into law, it could have a domino effect across the U.S., which is currently at the forefront of the global crypto-mining industry, accounting for 38% of the world’s miners.