'Sloppy' US crypto mining survey put on pause by Texas judge

The U.S. Department of Energy has to temporarily bring to a halt an emergency survey that aims to measure crypto mining firms' electricity consumption, a Texas judge ruled. 

Judge Alan Albright of the U.S. District Court for the Western District of Texas Waco Division issued a temporary restraining order on Friday after the Texas Blockchain Council and bitcoin mining company Riot Platforms sued the Department of Energy last week calling the survey a product of "sloppy government process." 

The Energy Information Administration (EIA) — a statistical and analytical agency within the Department of Energy — announced earlier this month that it would begin surveying crypto mining firms following an "emergency collection of data request," citing bitcoin's increase in price over the past few months as evidence for that emergency request. 

The EIA has argued that as crypto mining has increased, concerns have grown around the effects it could have on the U.S. electric power industry. 

The Texas Blockchain Council and Riot Platforms have pushed back saying that mining companies would be "irreparably harmed by being forced to divulge confidential, sensitive, and proprietary information to EIA, which had no lawful authority to request or collect."

Judge Albright criticized the Department of Energy in the order and said the survey was approved under an emergency provision of the Paperwork Reduction Act, which allows executive agencies to detour certain steps such as notice-and-comment periods. 

"Such emergency requests are only appropriate upon an agency head’s determination that public harm is reasonably likely to result if normal clearance procedures are followed," the judge said. "The Court believes that Plaintiffs are likely to succeed in showing that the facts alleged by Defendants to support an emergency request fall far short of justifying such an action."

In response to the judge's order, the EIA said it would not seek to impose fines, penalties or other consequences on companies for not responding to the survey through March 22, in a post on Friday on X. The EIA declined to comment on next steps. 

Texas Blockchain Council President Lee Bratcher said the judge's ruling validated that the EIA and Department of Energy "did not comply with the statutes."

"It is crucial that Federal Agencies operate within their designated authority rather than attacking industries that have fallen out of favor with the administration in power," Bratcher said in an emailed statement to The Block. 

Time discrepancies

In the initial complaint, members of the Texas Blockchain Council, including Riot, said that the survey will take "multiple employees many hours at each company every month," despite EIA saying it would take only half an hour each month, according to the complaint. 

The court disagreed with EIA calling the estimated 30 minutes to take the survey "extremely inaccurate, if not grossly misleading."

A hearing to discuss a preliminary injunction will be held on Wednesday. 

Lawmakers weigh in 

House Majority Whip Tom Emmer, R-Minn., called the survey an abuse of power and sent a letter to the Office of Management and Budget last week over its move to authorize the EIA's survey. 

Emmer responded to the temporary restraining order in a post on X on Friday.

"Great news! The Energy Information Administration is backing down on its 'emergency' demand for Bitcoin miners to share proprietary information," Emmer said. "We rejected this administration’s abuse of emergency authority, and common sense prevailed."

Other lawmakers, including Sens. Elizabeth Warren, D-Mass., Sheldon Whitehouse, D-R.I., and Rep. Katie Porter, D-Calif., have said they are concerned about crypto mining firms' energy usage and sent letters last year to six crypto mining companies to ask about their operations. 

“The extraordinarily high energy usage and carbon emissions associated with Bitcoin mining could undermine our hard work to tackle the climate crisis - not to mention the harmful impacts cryptomining has on local environments and electricity prices. We need more information on the operations of these cryptomining companies to understand the full scope of the consequences for our environment and local communities,” Warren said in a statement in January 2022.