A crypto mining company is suing an Arkansas County judge and prosecutor over what it claims is selective enforcement action against crypto firms.
In a complaint filed with the district court of Arkansas on Sept. 26, Bitcoin mining firm NewRays alleges that Judge Allen Dodson, prosecuting attorney Phil Murphy, and others are selectively enforcing noise legislation targeting its business operations.
NewRays acquired the property in Faulkner County, Arkansas, in October 2022 to operate a data center for crypto mining at a time when there were no relevant zoning restrictions.
However, following complaints from residents, local laws were enacted, imposing decibel limits and criminal sanctions for violations.
Screenshot from the complaint. Source: Law.com
According to the complaint, the ordinance — a local law or decree by a municipality — allegedly violates the Arkansas Data Centers Act enacted in April 2023, which protects large computing and data mining operations from discriminatory regulations.
NewRays claims the defendants coordinated to enforce the ordinance, potentially to benefit a civil lawsuit filed by residents.
Legal complications arose when NewRays attempted to remove the civil lawsuit to federal court, but the county district court claimed jurisdiction.
Justin Daniels, a partner at Baker Donelson, told Law.com that the practice of targeting crypto companies is common due to Bitcoin’s reputation and criticism for the amount of energy it uses.
Data training centers for artificial intelligence do the same thing, “yet I don’t hear the criticism,” he said before adding:
“The reason for that is that the general consensus is that AI has a lot of value and a lot of people think that Bitcoin doesn’t have value.”
However, the county began discussing a “crypto mine ordinance” as early as June 2023, which was intentionally designed to discriminate against data centers and crypto mining operations, according to the complaint.
The complaint alleges that “Ordinance 23-20” was intended to apply only to NewRays, despite other businesses generating more noise.
NewRays has requested that the court enter preliminary and permanent injunctive relief restraining all defendants from enforcing the ordinance.
Cointelegraph contacted Judge Dodson for comment but did not receive an immediate response.
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