Senator questions crypto companies' impact on local communities
Sen. Ron Wyden raised concerns that cryptocurrency mining companies may be exploiting Opportunity Zones without generating enough jobs and economic development for the local community.
In a bid to monitor business’ tax evasion in federally-designated Opportunity Zones, Sen. Ron Wyden, D-Ore., questioned two cryptocurrency companies on how their businesses would positively impact a low-income community.
The Opportunity Zone program passed in a 2017 reconciliation, works to incentivize companies, private firms and investors to operate out of select low-income areas and bring job creation and economic prosperity to these regions in exchange for tax breaks.
Addressing Argo Blockchain and Redivider Blockchain on their business activities in Dickens County, Texas, Wyden asked company leadership for clarity on their economic impact on the surrounding communities.
“Currently, the lack of safeguards and transparency measures in the Opportunity Zone program raise the possibility that taxpayers are simply subsidizing companies involved in cryptocurrency mining,” Wyden wrote in the letter to Argo Blockchain. “There is currently no requirement that such companies demonstrate the benefit they are providing to low income-communities they claim to help.”
A letter was also addressed to Blake Christian, a Certified Public Accountant reportedly involved in crypto transactions.
Wyden cited a report that raised concerns about cryptocurrency mining companies exploiting these Opportunity Zones to mine digital currencies without sufficiently generating economic development for the communities from which they are operating.
In a list of questions, Wyden requested information on how much money is invested in the crypto projects, how many temporary and permanent jobs these companies will create, the site of the project, how each project was designed and the extent of the investment in this Opportunity Zone.
This letter follows the government’s increasing interest in regulating the cryptocurrency industry. President Joe Biden recently released the first executive order regarding cryptocurrency policies and regulations, with the focus on ensuring crypto mining and operations have an egalitarian benefit.