City of Niagara Falls orders Blockfusion facility to cease and desist crypto mining

The city notice effectively stops the facility from conducting “any cryptocurrency mining or related operations” until Blockfusion is in compliance with local zoning ordinances.

The City of Niagara Falls has issued a cease-and-desist notice to New York-headquartered crypto mining firm Bit Digital over a data facility owned and operated by its partner Blockfusion.

In an Oct. 7 announcement, Bit Digital said the city notice would effectively stop the facility from conducting “any cryptocurrency mining or related operations” until Blockfusion was in compliance with local zoning ordinances. The Niagara Falls ordinance went into effect on Oct. 1 following a moratorium, requiring Blockfusion to apply for additional permits that “may take several months to process.”

According to Bit Digital, the Blockfusion facility was one of two forced to cease the operations of more than 4,800 rigs after “an explosion and subsequent fire” at a substation in Niagara Falls in May. The company reported power was restored in September. As of Oct. 6, roughly 17% of Bit Digital’s 13,980 active miners — 2,376 rigs — were at the single New York facility.

“Pursuant to the Mining Services Agreement between Bit Digital and Blockfusion dated August 25, 2021, Blockfusion represents, warrants and covenants that it ‘possesses, and will maintain, all licenses, registrations, authorizations and approvals required by any governmental agency, regulatory authority or other party necessary for it to operate its business and engage in the business relating to its provision of the Services.’” said Bit Digital. “On October 5, 2022, Bit Digital further noticed Blockfusion that it expects it to comply with directives of the Notice.”

The City of Niagara Falls imposed a 180-day moratorium on Bitcoin BTC mining starting in December 2021 after many residents reportedly issued many complaints about the facilities, including excessive noise. New York state lawmakers have considered similar proposals for a state-wide moratorium on crypto mining activities. The Niagara Falls moratorium was later extended to end in September.

Cointelegraph reached out to Blockfusion, but did not receive a response at the time of publication.