A federal judge in Little Rock, Arkansas, has temporarily halted state efforts to shut down a cryptocurrency mining operation owned by Qimin “Jimmy” Chen, a naturalized U.S. citizen of Chinese descent.
On November 25, Chief U.S. District Judge Kristine Baker issued a temporary restraining order (TRO) in favor of Jones Eagle, Chen’s crypto-mining firm, shielding it from enforcement under controversial state laws.
Disputed State Laws Target Crypto Mining
The legal clash centers on two Arkansas laws:
- Act 636 of 2023: Prohibits companies or individuals tied to the Chinese government from owning property in the state.
- Act 174 of 2024: Bars foreign entities from owning digital asset mining operations.
State officials alleged Chen is a Chinese national and sought to shut down his business permanently. However, Chen, who resides in New York, contended that these actions constituted illegal discrimination based on his national origin.
Federal Judge Grants Temporary Relief
Judge Baker’s ruling temporarily blocks state officials from enforcing the laws against Chen’s operation for 14 days. A hearing will follow to determine whether a preliminary injunction will extend this protection.
Chen’s attorney, Alex Jones, applauded the decision, emphasizing the need to challenge the laws’ constitutionality, arguing they overreach legislative boundaries.
Compliance Efforts and Discrimination Claims
Chen has reportedly cooperated with state regulators, providing documents to confirm that his mining operation does not sit on restricted agricultural land. He also attempted to clarify his U.S. citizenship status with officials but was denied a meeting.
Arkansas Attorney General Tim Griffin noted his ongoing investigations into crypto mining operations but expressed concerns about transparency from certain entities.
Broader Implications for Cryptocurrency Regulation
This case spotlights the growing scrutiny of crypto mining operations across the U.S.
In Texas, for instance, the Public Utilities Commission (PUCT) recently mandated that Bitcoin miners connecting to the ERCOT grid register their facilities, ownership details, and electricity demands. Violators face hefty penalties of up to $25,000 per day.
Texas Senator Ted Cruz, a staunch Bitcoin advocate, has championed the state as a haven for cryptocurrency innovation, aiming to attract miners and create jobs in the region.
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