City of Niagara Falls Orders Blockfusion Facility to Stop Crypto Mining

The city's notice effectively prohibits the facility from conducting "any cryptocurrency mining or related operations" until Blockfusion complies with local zoning ordinances.

The City of Niagara Falls has issued a cease-and-desist notice to New York-based cryptocurrency mining company Bit Digital for a data facility owned and operated by partner Blockfusion.

Bit Digital said in an October 7 statement that the city’s notice will effectively stop the facility from conducting “any cryptocurrency mining or related operations” until Blockfusion complies with local zoning ordinances. The Niagara Falls ordinance went into effect Oct. 1 after the moratorium, requiring Blockfusion to apply for additional permits that “may take several months to process.”

According to Bit Digital, the Blockfusion facility was one of two facilities forced to suspend operations of more than 4,800 facilities after “an explosion and subsequent fire” at a Niagara Falls substation in May. The company reported that power had been restored in September. As of Oct. 6, approximately 17% of Bit Digital’s 13,980 active miners – 2,376 rigs – were located at its sole facility in New York.

“In accordance with the Mining Services Agreement between Bit Digital and Blockfusion dated August 25, 2021, Blockfusion represents, warrants and undertakes that it “holds and will maintain all licenses, registrations, permits and approvals required by any government agency, regulatory body or other a party necessary for it to conduct its business and participate in business related to with i is the provision of the Services,” said Bit Digital. “On October 5, 2022, Bit Digital Blockfusion further noted that it expects to comply with the notice’s policies.”

The city of Niagara Falls implemented a 180-day moratorium on bitcoin mining starting in December 2021 after many residents reportedly filed numerous complaints about the facilities, including excessive noise. New York legislators are considering a similar proposal to suspend cryptocurrency mining activity statewide. The Niagara Falls ban was later extended to end in September.

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