Three Cryptocurrency Mining Operations in Niagara Falls Sued
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Three cryptocurrency mining operations in Niagara falls have been sued after failing to comply with a recently enacted series of amendments to the city’s Zoning Code that govern the location and operation of high-energy use industries, like data centers and cryptocurrency mining facilities.

U.S. Data Technologies Group Ltd., U.S. Data Mining Group Inc, doing business as U.S. Bitcoin, and 2747 Buffalo Avenue LLC have been accused of “ongoing violations” of the Zoning Code, which led to creating a “public nuisance”. The Falls City Council at a meeting on Nov. 2 authorized the legal action and the lawsuit was filed on Nov. 16.

Mayor Robert Restaino, in a letter to the council, said, “the city has worked to create a path forward for cryptocurrency and data centers. Several companies, which have never been in compliance, are operating in violation of long-standing zoning and building codes and creating potentially dangerous public nuisances.”

The three crypto-mining companies received letters from the city’s Department of Code Enforcement in November and December 2021. They demanded the companies “cease and desist” their operations until they were in compliance.

On September 8th, the council’s decision to approve amendments to the zoning code resulted in Council Member Donta Myles voting against the efforts. Both the Niagara Falls and Niagara County planning boards had recommended the zoning codes be approved after they had completed a review and found no major issues. City residents living near three cryptocurrency mining operations attended a public hearing on Sept 8th, voicing their concerns and frustrations associated with unreasonable noise levels.

Bryan Maacks, who lives near the U.S. Bitcoin facility inside what had been an abandoned industrial plant on Buffalo Avenue said, “At the beginning of the year my home was invaded by noise. It has changed my life. It is constant, 24 hours a day. I’m here for myself and my mental health.”

The lawsuit is being handled by Dan Spitzer and Joel Terragnoli of Hodgson Russ LLP and Edward Perlman of Magavern Magavern Grim LLP, outside legal counsel for zoning-related matters. None of the attorneys were able to comment on the suit, but Spitzer has previously made clear the city’s position on the siting of high-energy use industries.

He further added Cryptocurrency mining and data centers are currently illegal in the city.[But] we are working with the industry to establish (rules) that would allow them.

A new zoning code restricts data centers and mining operations to industrial locations only. The amendments also act as an overlay to the city’s current industrial zoning requirements and add new restrictions so that high-energy use facilities are set back from their neighbors by a larger distance.

These changes will also impose restrictions on the high energy usage of these operations. Representatives of the three companies that have been named in the legal action had previously requested to be exempted from the new Zoning Code requirements. It is not known who will represent the crypto-mining companies in this lawsuit.

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