Oklahoma Law Limits Regulation of Bitcoin Mines Amid Water Crisis

A Bitcoin mining facility in El Reno, Oklahoma, drained millions of gallons from the town's water supply after an investigation found that the operation was not supposed to be running.

According to News 4, a fire hydrant connected to a private water line at the facility leaked an estimated 3.8 million gallons of water, causing widespread low water pressure and forcing schools to cancel classes due to concerns over the fire suppression system.

The facility was owned by Athlon Blockchain Technology LLC, which listed its CEO as Tony Shi on its website. However, when News 4 visited the property, they found that it appeared abandoned, with packages addressed to Shi scattered across the porch.

Athlon had filed for building permits in 2022 but failed to comply with code and construction regulations, leading to a stop work order from the city. Despite this, the facility continued to operate illegally, leaving El Reno residents without access to clean drinking water during a heatwave.

The incident has raised concerns over Oklahoma's lack of regulation surrounding Bitcoin mining, which is allowed under the Blockchain Basics Act passed in 2024. The law limits local governments' ability to regulate Bitcoin mines and requires them to treat data centers used for cryptocurrency mining as the same thing as other data centers, even though they consume large amounts of electricity and water.

Experts point out that this law essentially encourages companies to set up their operations in Oklahoma without regard for local regulations or concerns. The Satoshi Action Fund, a nonprofit Bitcoin mining advocacy group, has lobbied for similar legislation in other states and was found to have provided model text for the Blockchain Basics Act.