US Judge Halts Arkansas Crypto Mining Laws in Chinese Ownership Case

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Gavel and cryptocurrency symbols representing a legal dispute in the United States
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Federal Judge Issues Temporary Restraining Order

On November 25, Chief US District Judge Kristine Baker in Little Rock, Arkansas issued a TRO against the enforcement of two state laws targeting cryptocurrency miners with ties to Chinese nationals. In the meantime, actions will be temporarily stayed against Jones Eagle, a cryptocurrency mining firm owned predominantly by Qimin “Jimmy” Chen, a naturalized US citizen of Chinese descent.

The case centers on Arkansas Acts 636 and 174: Act 636, on one hand, bars from property ownership those entities or persons connected with the Chinese government; Act 174, on the other hand, specifically prohibits foreign entities from owning digital asset mining operations. Chen’s lawyers countered that these laws singled him out on the basis of his national origin, despite his naturalized citizenship.

Ownership Dispute and Alleged Discrimination

The state of Arkansas claimed that Chen’s mining operations violated these laws due to his connections to China. However, Chen presented evidence of his naturalized US citizenship and accused state officials of unconstitutional discrimination. His attorney emphasized that the laws overreach legislative authority and infringe on constitutional protections.

The TRO keeps Chen’s operations safe for 14 days, and state authorities cannot take any immediate action until then. Within this period, a court hearing will be held to determine if the restraining order is to be extended or turned into a preliminary injunction.

Ongoing Legal Battle

Alex Jones, an attorney for Chen, said they were confident in their case since the TRO would prevent immediate harm to their client while they build up for a comprehensive trial. They will also make arguments that the laws are unconstitutional, amounting to undue interference by the legislature, and deny equal protection. 

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State’s Investigation into Crypto Mining

Attorney General Tim Griffin justified the state’s move, citing ongoing investigations into crypto-mining operations in Arkansas. He claimed not all firms had cooperated with inquiries, though Chen maintained that he had submitted documentation and sought discussions with state authorities to prove compliance.

Implications for Crypto Regulation

The case illustrates tension between state regulation of operations in cryptocurrency and constitutional protection for individuals and businesses. As the legal proceedings proceed, this might well prove to be an important landmark for crypto miners and foreign investment within the United States.

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