Crypto miner ire over EIA survey bubbles over to the courtroom

The crypto mining industry is pushing back against the Energy Information Administration’s  request for data — this time via legal action.

In a complaint against the US Department of Energy agency — filed Thursday in Waco’s federal district court — the Texas Blockchain Council and Riot Platforms called the EIA’s recent survey “invasive government data collection.”

The plaintiffs are referring to the EIA seeking details about firms’ electricity consumption, energy suppliers and other data. Filed as an “emergency collection of data request,” the survey was authorized by the Office of Management and Budget on Jan. 26.

Read more: US Department of Energy demands consumption stats from bitcoin miners

Riot Platforms and other miners “will be immediately and irreparably harmed by being forced to divulge confidential, sensitive and proprietary information to EIA, which had no lawful authority to request or collect,” the complaint states.

The Texas Blockchain Council and Riot are asking the court to issue a restraining order or preliminary injunction prohibiting the EIA from collecting the information.

An EIA spokesperson said the agency cannot comment on pending litigation, and a Riot Platforms representative also declined to comment.

The Texas Blockchain Council is a non-profit organization that advocates for the crypto mining industry. Riot Platforms is one of the largest publicly listed bitcoin mining companies. With facilities in Texas, Riot had a deployed hash rate of 12.4 exahashes per second (EH/s), as of Jan. 31, and produced 520 BTC last month.

Texas Blockchain Council president Lee Bratcher told Blockworks that the EIA’s efforts are “unprecedented actions…in violation of several federal statutes.” These include bypassing mandatory notice and comment period, and the threat of criminal penalties for not responding.

Information used in the survey “may be publicly released in company identifiable form,” according to the survey.  

Bratcher noted that the group has recommended to its members not to respond to the survey until its legal challenge is heard. 

There was a court hearing slated for Friday to determine whether or not the restraining order would be approved. 

Nishant Sharma, founder of bitcoin mining-focused advisory firm BlocksBridge Consulting, noted that the EIA’s survey request came after a series of letters and bills from lawmakers who have voiced opposition to crypto mining and the broader industry. 

Sen. Elizabeth Warren, D-Mass., and others called on federal regulators in 2022 to instruct cryptocurrency miners to disclose their emissions and energy use. Warren co-sponsored the Digital Asset Anti-Money Laundering Act last year.

Read more: Former government officials say DAAMLA could harm US crypto industry

“This makes mining companies feel unfairly treated and discriminated against despite all the work they have been doing to strengthen regional energy grids, support local communities, collaborate with regional governments and increase energy efficiency,” Sharma told Blockworks. “Frankly, given all the available facts and data about the industry, it appears to be a weaponization of an otherwise benign government agency for political gains.”

House Majority Whip Tom Emmer, R-Minn., wrote in a Thursday letter to the Office of Management and Budget that “bitcoin miners do not present a threat to public safety.”

Still, Stronghold Digital Mining CEO Greg Beard said his company has taken a “cooperative stance” toward the EIA’s request. He called the survey “a legitimate effort to understand bitcoin mining’s impact on the electrical grid” in an email to Blockworks.

The EIA survey didn’t include all the necessary questions that would give it a full picture of the potential impact or benefits of mining operations, Beard argued. 

There were no questions about bitcoin miner capacity to supply energy to the grid, for example. Nor was there an inquiry about how often crypto miners adjust energy consumption during periods of high demand, he added. 

Read more: Not all about bitcoin production: Miners benefit by curtailing operations

“We would hope that the EIA studies bitcoin miners and their flexible energy consumption and determines, rightly, that they can be designed and run to be an economical and practical way to replace grid-scale batteries, contributing to grid stability while benefiting consumers with lower costs.”

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About the Author: Daniel