Arkansas crypto group challenges two state mining restrictions

The Arkansas Cryptomining Association (ACA) has filed a federal lawsuit against Attorney General Tim Griffin and Arkansas Oil and Gas Commission Director Lawrence Bengal.

The legal action targets two state regulations—Act 174 and Rule K—which restrict foreign-controlled businesses from operating crypto mining facilities.

Filed on March 13 in the U.S. District Court for the Eastern District of Arkansas, the lawsuit claims these laws grant officials “arbitrary and discriminatory enforcement powers.”

ACA Director Connor L. Kempton argued the regulations violate the 14th Amendment’s Equal Protection Clause by enabling bias based on race, nationality, or citizenship status.

The case centers on enforcement actions against Jones Eagle LLC, a crypto mining firm owned by Qimin “Jimmy” Chen, a naturalied U.S. citizen of Chinese descent.

State officials previously blocked Chen’s operations under Act 174, which bars foreign-party-controlled businesses from crypto mining.

In December 2024, U.S. District Judge Kristine G. Baker temporarily halted enforcement of the law against Chen’s company, citing constitutional concerns.

Kempton asserted that Act 174 infringes on federal authority over foreign policy and investments.

“Act 174 seeks to establish Arkansas’s own foreign policy, thereby intruding upon the federal government’s exclusive power to govern foreign affairs,” the lawsuit states.

The ACA also claims the laws deny due process rights by allowing officials to approve or reject permits without clear guidelines.

Act 174, passed in 2023, requires crypto mining operators to disclose foreign ownership and imposes penalties for noncompliance.

Rule K mandates background checks for mining facility owners.

Critics argue these measures disproportionately target foreign-born entrepreneurs like Chen, who obtained U.S. citizenship in 2012.

Arkansas lawmakers defend the regulations as safeguards against foreign influence and environmental risks.

Recent legislation has also limited noise levels and water usage at mining sites.

Supporters claim these rules protect local communities, but opponents argue they stifle economic growth and innovation.