According to a new report from the federal oversight group, the Department of the Interior’s Office of the Inspector General (DOI OIG), cryptocurrency miners operating on public lands have not been paid their dues. the Regulatory agency documentpublished this week and dated Monday, highlights the lack of clear policy surrounding crypto mining, which has left the US government and its territory at a loss.
Fossil fuel companies and other resource extraction Mine industries, in part, on federal lands Through the system of permits and leases. As part of the arrangement, the government receives a bribe through royalty payments on all oil and gas extracted (previously 12.5% of revenue from onshore operations, but recently increased to 18.75% by the Biden administration).
But apparently, some of these oil and gas teams working on public lands have set up side squabbles for cryptocurrency, which don’t count toward their royalties payments. DOI OIG has identified at least one gas company that is drawing fuel at source from a federal lease of power servers that is racing to mine blockchain dollars, after the agency was notified by the Colorado Oil and Gas Conservation Commission. “In other words, these activities generate revenue for private companies that use federally owned gas, sometimes without the lessee paying metal royalties,” the report reads. “As a result, these activities could result in a loss of federal or tribal mineral revenue.”
On top of federal fuel being used without federal authorization (and without the agreed-upon fee), there are also potential safety issues for the land and people involved in operating these cryptocurrency mining units, according to the US Department of State Commerce.
The report notes that “cryptography itself requires physical infrastructure and can have a significant impact on the land in which it occurs.” Encoder units include large generators, refrigeration equipment, and a large number of computer arrays located in mobile facilities. These facilities are constantly running and require huge amounts of energy.” And DOI OIG is definitely not wrong. The value of manufacturing on the blockchain is intense energy And Dirty business. Actually, cryptocurrency mining It uses more energy than the actual mining process stuff from the ground, according to One 2018 study.
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In addition, the Monitoring Group’s report notes that the server systems it has documented in Colorado are mobile units — making it easier for fossil fuel companies to pass cryptocurrencies and evade detection to the Bureau of Land Management or other agencies. Without proper declaration and approval, these mining units could be inadvertently located in sensitive areas, causing damage to infrastructure, and may not be adequately secured against accidents, the Home Office office wrote.
“Overall, we identified the use of federal gas to support cryptocurrencies as an emerging problem with potential impacts on federal and tribal lands and resources,” the report says. To resolve the issue, the OIG has recommended that the Department of the Interior issue formal guidance on how to handle cryptocurrencies moving forward, “addressing potential land use concerns, safety risks, environmental impacts, and royalty collection requirements.”
In response, the Home Office told the Office of Inspector General (OIG) that it would “take steps to include detection of cryptographic threats in the training of future inspectors and investigators,” along with other measures including notifying its agencies and holding a meeting. But for OIG, these measures aren’t quite enough. “We consider this recommendation resolved, but not implemented,” the IAEA wrote. We will continue to monitor [DOI’s] Procedures to determine whether clear and consistent guidance has been conveyed.
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