Arkansas State House Advances Bills Aimed at Regulating Cryptocurrency Mining

The Arkansas State House has taken significant steps towards regulating cryptocurrency mining within the state by passing two bills that could potentially shape the future of the industry. While these bills have not yet become law, they mark a pivotal moment in ongoing discussions surrounding the impact of crypto mining operations.

During a Senate hearing held on April 17, lawmakers deliberated on various concerns related to cryptocurrency mining, including noise pollution, foreign ownership, and the proximity of mining facilities to residential areas. The passage of two out of eight bills presented to the House on Wednesday indicates a growing consensus among legislators to address these issues, despite the Senate’s recent approval of only one bill pertaining to cryptocurrencies.

One of the bills under consideration, Act 851, known as the Arkansas Data Centers Act of 2023, aims to establish regulatory frameworks for Bitcoin mining activities in the state. The proposed legislation seeks to provide guidelines for miners while safeguarding them against discriminatory regulations and taxes. This move comes in the wake of recent controversies in other jurisdictions, such as Sweden, where crypto miners have come under scrutiny for alleged tax evasion.

In Sweden, the Tax Agency uncovered significant discrepancies in the tax filings of 21 crypto-mining firms between 2020 and 2023, leading to investigations into potential tax evasion practices. The probe revealed that several mining companies had submitted misleading or incomplete information to exploit tax incentives, resulting in unpaid taxes totaling over 990 million Swedish krona (approximately $90 million USD).

The tax authorities have demanded that these crypto mining firms settle their outstanding tax liabilities, including unpaid value-added tax (VAT) and tax surcharges. While some mining companies have contested the tax assessments, arguing against the legitimacy of the demands, the administrative court has upheld the tax claims for the majority of the firms involved, signaling a crackdown on tax evasion within the crypto industry.

Digital Assets Desk