Cryptocurrency mining regulations clear state Senate, head to House

LITTLE ROCK — Two bills that would regulate cryptocurrency mining operations in Arkansas passed the state Senate Wednesday and will be considered by the House.

Senate Bill 79 passed with 32 votes for and no dissent, while Senate Bill 78 passed with 26 votes in favor and three votes against it. A few senators abstained from voting on either or both bills.

SB78 would place noise limits on crypto mines, prohibit them from being owned by certain foreign entities and allow local governments to pass ordinances regulating the mines. Bill sponsor Sen.

Joshua Bryant, R-Rogers, called it “hopefully an administrative fix” to Act 851 of 2023, or the Arkansas Data Centers Act.

“I can’t say it’s perfect, but I don’t want perfect to get in the way of good,” he said.

Act 851, also sponsored by Bryant, was introduced and passed in the final week of the 2023 legislative session. The law limited local governments’ ability to regulate crypto mines, which are large groups of computers that harvest digital currency and are often located in rural areas because of the space they take up.

Officials have expressed frustration about how quickly Act 851 moved through the Legislature and have raised concerns over the mines’ potential foreign ownership and national security risks.

There are crypto mines in De-Witt and in the Bono community near Greenbrier, and an out-of-state entity has attempted to start a crypto mine near Harrison. Sen. Bryan King, R-Green Forest, represents Harrison and has been one of the Legislature’s most vocal proponents of cryptocurrency regulations.

King sponsored six resolutions that passed the Senate but failed in the House within the past two weeks, meaning he could not introduce his own set of crypto regulation proposals during the fiscal session, which focuses on the state budget.

King voted against SB78 and has repeatedly said its proposed regulations are not strong enough. He voted for SB79, though he said he had

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qualms about the bill, which contains much of the same language as SB78 and is sponsored by Sen. Missy Irvin, R-Mountain View.

The resolution that allowed SB79 to be drafted contained language that would have required crypto mines to be licensed by the state Department of Energy and Environment. The bill would put that responsibility in the hands of the state Oil and Gas Commission.

Both bills would give “a prohibited foreign-party-controlled business” exactly a year after the enactment of the policies to divest from ownership of an Arkansas crypto mine.

King asked Bryant why the legislation would give businesses so much time to divest. Bryant said the clause resulted from advice from Attorney General Tim Griffin’s office.

Irvin made a similar statement Tuesday to the Senate City, County and Local Affairs Committee before it passed an amended version of SB79.

The Bono community is in Irvin’s district, and local residents have filed a lawsuit claiming noise pollution from the local crypto mine.

In addition to King, Democratic Sens. Greg Leding of Fayetteville and Stephanie Flowers of Pine Bluff voted against SB78.

King and Flowers both said the Legislature should have a special session this year to consider more crypto regulations.

“What I worry about… is that we’re just going to kick the can down the road on the rules and regs,” King said.

Flowers represents part of Arkansas County, where the crypto mine near DeWitt is located, and she said her constituents have told her SB78 is “a bad bill.”

“We don’t know the full extent of these centers,” she said. “…Something doesn’t smell right about all this.”

Bryant said he would urge Gov. Sarah Huckabee Sanders to call a special session if SB78 and SB79 become law but do not resolve the public’s problems with crypto mines.

Both bills have emergency clauses and would go into effect immediately upon Sanders’ signature.

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Little Rock woman pleads guilty to transporting stolen human body parts out of state

LITTLE ROCK — Jonathan D. Ross, United States Attorney for the Eastern District of Arkansas, announced Thursday that a former employee of a mortuary services provider has pleaded guilty to transporting stolen body parts across state lines and conspiracy to commit mail fraud.

Candace Chapman Scott, 37, of Little Rock, entered this guilty plea Thursday before United States District Judge Brian S. Miller.

Judge Miller will sentence Scott at a later date. Transporting stolen property across state lines is punishable by not more than 10 years’ imprisonment, not less than three years’ supervised release, and a fine of not more than $250,000. The maximum penalty faced by Scott for mail fraud is not more than 20 years’ imprisonment, not less than three years’ supervised release, and a fine of not more than $250,000.

The investigation revealed that Scott, while an employee at a mortuary services provider between October 2021 through approximately July 15, 2022, stole human body parts and fetal remains.

Scott would then sell the stolen human body parts and fetal remains, arranging for them to be transported across a state line to the purchaser.

Scott was indicted on April 5, 2023, and charged with six counts of wire fraud, four counts of mail fraud, and two counts of interstate transportation of stolen property. In exchange for her guilty plea, the remaining charges were dismissed.

The case was investigated by the FBI.

If you have information relating to this case or think you may have been impacted by this case, you may contact the U.S. Attorney’s Office by email at USAARE-Submit-Info@usdoj.gov.