A White House report proposes outright restrictions on proof-of-work mechanisms if US crypto mining companies fail to reduce the industry's environmental impact

- The White House encouraged a broad policy push to reduce greenhouse gas emissions and urged the use of clean energy by U.S. crypto mining companies.

The Block 2022-09-09 Michael McSweeney

Context & Ripple Effects

The White House had already backed a narrower infrastructure-bill approach that exempted crypto miners from the broker definition. This report adds an environmental test to the federal policy debate, making miners’ energy choices a potential basis for intervention.

The administration followed with a broader federal crypto-regulation framework, while later energy-data collection efforts faced resistance from miners and an industry group. Together, the coverage shows environmental oversight becoming a distinct and contested part of U.S. crypto policy.

First-order effects

U.S. proof-of-work mining companies are put on notice that failing to reduce greenhouse-gas emissions and use cleaner energy could trigger restrictions on their operating mechanism.
The White House elevates mining energy use from a voluntary industry concern to a stated condition for potential federal action.

Second-order effects

Mining operators face greater pressure to substantiate clean-energy claims, because environmental performance is now tied to the prospect of proof-of-work-specific policy.
Energy-use measurement becomes a consequential regulatory battleground, a tension reflected later when the DOE suspended its mandatory miner energy survey after litigation.

Third-order effects

If federal policy continues to treat proof-of-work energy use as a distinct risk, U.S. crypto regulation will differentiate among network mechanisms rather than regulating the sector only through financial-intermediary rules.
The later White House crypto-risk roadmap suggests a wider shift toward coordinating crypto oversight across policy concerns, with mining’s environmental footprint remaining one of the sector’s legitimacy tests.

The trend: U.S. crypto policy is moving from narrow classification disputes toward risk-based oversight that can target mining’s energy footprint directly.

Discussion

@superwuster Tim Wu on x
Today the White House made clear our policies on tech antitrust, privacy, algorithmic transparency and other areas of tech policy — details are here: https://www.whitehouse.gov/...
@ali_lev Alexandra S. Levine on x
Ok call me cynical but what does putting out “principles” for tech platform accountability actually do? The Biden admin's priorities and positions on most of these issues have been clear since early on, and little has changed: https://www.whitehouse.gov/...
@howarth_cornell Robert Howarth on x
New White House report on cryptocurrency & global Change. Current GHG emissions are “25 to 50 Mt CO2/y, which is 0.4% to 0.8% of total US GHG emissions, similar to emissions from diesel fuel used in railroads in the US.” https://www.whitehouse.gov/...
@jimsteyer Jim Steyer on x
Great to see the @WhiteHouse establish these important principles to hold tech accountable. It's nice to see they mirror many of @FOTComm's policy recommendations on key issues, such as privacy, transparency, and threats to children's safety online. https://www.whitehouse.gov/...
@crypto_council @crypto_council on x
1/ The @WHOSTP released its climate and energy paper following the @POTUS executive order on #crypto https://www.whitehouse.gov/... https://twitter.com/...
@ben_inskeep Ben Inskeep on x
New report from the White House OSTP finds that crypto-asset operations, such as Bitcoin miming, currently consumes about 0.9% to 1.7% of total U.S. electricity usage—a massive waste of energy that accelerates the climate crisis to make a few folks rich. https://www.whitehouse.go…
@lukewearechange Luke Rudkowski on x
The U.S government wants to put the nail in the coffin for #bitcoin because wait for it......... “climate change” https://bitcoinmagazine.com/ ...
@iansherr Ian Sherr on x
A good marker of how slow government runs: Ethereum will have gone through years of debate and the slow merge transition before the US government even leaves the starting line for regulation. https://twitter.com/...
@davidakaye David Kaye on x
the @WhiteHouse released a set of principles on “Tech Platform Accountability” today, opening with a generally dark take on the role of platforms, without distinguishing the massive variety out there. https://www.whitehouse.gov/... https://twitter.com/...
@jstein_wapo Jeff Stein on x
New — Treasury Dept to warn in 4 reports to White House of dangers of crypto, stress potential financial risks absent new government regulations. “Treasury is trying to create the analytical basis for very strong oversight of this sector of finance” https://www.washingtonpost.com…
@ben_mckenzie Ben McKenzie on x
“Treasury's reports will highlight the economic danger of cryptocurrencies in several key areas, including the fraud risks they pose for investors...” https://www.washingtonpost.com/ ...
@jstein_wapo Jeff Stein on x
The crypto industry is spending tens of millions of dollars trying to lobby Congress and the administration — but we're told the new reports from Treasury will say the sector could if left unsupervised pose serious risks to financial stability https://twitter.com/...
@sbf_ftx @sbf_ftx on x
1) I'M NOT A REGULATOR, THIS IS NOT LEGAL ADVICE but: my current best guess is consistent what @GaryGensler says: that the CFTC will regulate spot + futures for non-security tokens, and the SEC will regulate spot + issuance of tokens that are securities https://www.wsj.com/...
@marionawfal Mario Nawfal on x
🚨Breaking:🚨 SEC Chair Gensler says crypto market intermediaries need to register with the agency. Gensler also stated that many crypto market actors are operating as exchanges, broker-dealers, clearing firms, and custodians https://twitter.com/...
@garygensler Gary Gensler on x
The #SECSpeaks Conference has officially started. Tune in shortly to watch my remarks at https://media.pli.edu/... The topic of discussion: crypto!
@jenniferjschulp Jennifer J. Schulp on x
At #SECSpeaks, SEC Chair Gary Gensler tried to channel the SEC's first Chairman by building a speech around Joe Kennedy's saying that “No honest business need fear the SEC.” Kennedy was wrong, and Gensler was even more wrong when he said it today. 1/ http://sec.gov/... https://tw…
@cburniske Chris Burniske on x
“Gensler's posture is that he should be in charge of writing the rules for crypto, but not write them.” “In crypto, only the honest businesses need fear the SEC. The incentives are bad.” Great piece by @matt_levine https://www.bloomberg.com/...
@blockchainassn @blockchainassn on x
We disagree with Chair Gensler that most digital assets are securities - and we firmly believe this is a matter for Congress rather than regulators. @JChervinsky sums it up for @WSJ: https://www.wsj.com/...
@jchervinsky Jake Chervinsky on x
“[Chair Gensler's] message is basically ‘I should be the main regulator of crypto, and...my plan is mostly to ban it.’” This is the most incisive rebuke of the SEC's failed approach to crypto I've ever seen. I'd quibble with Matt over a couple of points, but still, a must read: h…
@johnedeaton1 John E Deaton on x
The problem is he only considers #Bitcoin a commodity. He has specifically refused to acknowledge #ETH as a commodity and stated he is ONLY comfortable declaring #BTC a commodity. Why not provide an opinion on the top 20 Cryptos by market cap? https://twitter.com/...
@sbf_ftx @sbf_ftx on x
3) It seems pretty likely that BTC, ETH, and many forks/variants will not be securities; and that many other tokens will be securities. (How about other large tokens? Or futures or swaps on security tokens? Or tokenized stocks? And what exactly is a stablecoin? We'll see!)
@sbf_ftx @sbf_ftx on x
4) And, for what it's worth: I think this is all pretty reasonable; and a resolution providing regulatory oversight along these lines would be healthy for consumers, protect against risk, prevent scams, give clarity to the industry, and allow liquidity to come back to the US.
@jchervinsky Jake Chervinsky on x
Here's the transcript of Chair Gensler's remarks. He says nothing about ETH or about the SEC's June 2018 guidance, a notable omission given that it's both the most important statement the SEC has made on the Howey test & an accurate description of the law. https://www.sec.gov/...
@alex @alex on x
CFTC for crypto commodities SEC for crypto securities seems p reasonable https://twitter.com/...
@joecarlasare Joe Carlasare on x
This significantly increases the chances the bill passes: https://www.wsj.com/...
@bobpisani Bob Pisani on x
SEC Chair Gary Gensler has asked a large part of the crypto community to “Come in, talk to us, and register.” They may not be interested. He is asking the crypto community to embrace regulation, or risk being sued. https://www.cnbc.com/...
@tier10k @tier10k on x
Gensler, Powell and ECB all speaking at the same time Gonna hit neuralink rate limit https://twitter.com/...
@udiwertheimer Udi Wertheimer on x
#bitcoin maxis in complete shock and utter disbelief as SEC accepts that ETH isn't a security another idiotic narrative officially dead https://twitter.com/...

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