Cryptocurrency regulations in Massena are almost finalized, with a county review planned

MASSENA – The city of Massena is close to adopting regulations related to crypto operations in the city, but City Attorney Eric Gustafson wants the county to consider the proposal.

At a recent city board meeting, Gustafson told board members that adopting the regulations was not a prerequisite, but “out of an abundance of caution” he wanted the County Planning Board to review the proposed regulations before the city adopted them.

“This would be the first time anyone has passed regulations for such operations, so we want to make sure everything is in place before we move forward,” he said.

Once the legislation is adopted, it will bring an end to an extensive process that has already taken several years to get to this point.

One company in particular, North Country Colocation Services, sought very minor language changes that would allow them and similar companies to develop in industrial zones without the burden of excessive regulation.

North Country Colocation Services is a privately held data mining company that currently employs approximately 85 people and hopes to double employment opportunities once the expansion project is approved and completed.

During the March and April board meetings, NCCS CEO David Fogel addressed the board and current residents, informing them of his company’s objections to the regulations and the delay in finalizing them.

Fogel spoke at length about the efforts the company has made to take care of its employees, from competitive wages to benefits packages unheard of in most industries.

But Fogel said those benefits and future jobs are at risk because of language in the proposed legislation that would impose additional requirements on companies not only wanting to set up shop in Massena, but also hoping to expand.

He said NCCS’s planned expansion is no different than if Alcoa sought to expand its operations.

“We are being imposed all these additional regulations on expansion that would not apply to other companies. And by the way, they shouldn’t concern our business, because they don’t fit what we do. “I think they fit in with what small operators are doing,” Fogel said.

Fogel said that unlike other businesses in the area, NCCS complies with all city and zoning board regulations, has passed and will pursue development plan approval, follows OSHA guidelines and other various state and federal guidelines regarding employee safety.

Fogel said the operation is a professional unit with a proven track record, and the idea is supported by Massena Fire Chief Patrick O’Brien and foreman Aaron Hardy.

Both said Fogel and NCCS are great community partners who follow all regulations and do not cause any problems for code enforcement and the fire department.

Following Fogel’s speeches and public feedback, city board members and Gustafson revised the language of the proposed regulations so that companies like NCCS can continue to operate.

As originally intended when the moratorium was first discussed in 2018, the regulatory language will largely apply to shipping container operations and similar facilities that are not housed in a permanent structure and not located in an industrial zone.

Residents first raised concerns about other activities that were deemed to pose environmental and noise risks from “amateur operators,” as some residents called them.

Gustafson said the draft regulations are now complete and have been sent to the county for review.

“The County Planning Board does not have consent, but it does issue an advisory opinion on something like this that has to do with zoning regulations. Therefore, this task falls to the county,” he said.

Gustafson said if all goes well, city board members could potentially adopt the legislation next month. However, if even a minor change to the regulations were necessary, another public hearing would need to be scheduled.

“Whenever even a minor technical change is introduced, we will have to hold another public hearing before it is adopted. So that’s where we are tonight,” he said.

As the regulations near finalization, Gustafson has also begun walking city board members through the State Environmental Quality Review (SEQR) process, which is required once the regulations are finalized.

The city will be the lead agency in the SEQR process, which board members will begin working on and should be able to finalize by the next board meeting in June, Gustafson said.

“In practice, there are no agencies other than the city government that deal with cryptocurrency regulations. “It’s just us because the county is looking into it,” he said.

As it stands, the moratorium on crypto operations will last until September 30, although Gustafson has previously said the moratorium could be lifted before that date once the legislation is passed.