Regulars here at the shebeen are familiar with my attitude toward cryptocurrency. I have taken it as a good rule for living not to listen to people who come to me and say, “Look! I invented new money!” The whole thing seems more obvious in its scamitude than anything else in the history of American scams. At least Charles Ponzi dealt in actual American cash money. It wasn’t his but, hey, you can’t have everything. Over the weekend, however, The New York Times published a revelatory piece about how Arkansas has opened itself to Bitcoin “mining,” much to the discomfort and consternation of local residents. As Erik Loomis of Lawyers, Guns, and Money points out, it turns out that living close to a “mine” of any kind is an environmental disaster and a catastrophe for the quality of life for the neighbors.
The Bitcoin outfit here, 45 minutes north of Little Rock, is one of three sites in Arkansas owned by a network of companies embroiled in tense disputes with residents, who say the noise generated by computers performing trillions of calculations per second ruins lives, lowers property values and drives away wildlife…“Hell” is how Gladys Anderson describes life since the Bitcoin operation near Greenbrier opened last May less than 100 yards from her home. In July, she and nearly two dozen neighbors filed a lawsuit against the owners, NewRays One, blaming the operation for various health problems, including increased blood pressure, anxiety, difficulty sleeping and mood swings.
The lawsuit also suggests the mine has depressed property values. “Who would want to purchase property near the noisy site?” one of the residents, Rebecca Edwards, wrote in an affidavit. “Short answer: No one.” Computers have been running mostly around the clock, she said, creating so much noise—they require constant cooling by loud fans—that her son no longer goes outside. “The reason we moved out here was to get away from people, get away from noise,” she said.
In addition, the Times demonstrates that the Bitcoin operations are a creature and a tool of the international extraction industries—in this case, the extraction industries of China.
Concerns about the Arkansas mines have expanded beyond the initial noise complaints to include their connections to Chinese nationals. The operations are connected to a larger influx of Chinese ownership across the United States, The New York Times reported in October, some of which has drawn national security scrutiny. A web of shell companies connects the Arkansas operators to a multibillion-dollar business partially owned by the Chinese government, according to public records obtained by residents opposed to the operations. In November, the Arkansas attorney general’s office opened an investigation into them for potentially violating a state law barring businesses controlled by Chinese nationals from owning land.
And this leads us directly to the fingerprints of the previous administration*—You remember, the tough-on-China crowd—which was an environmental catastrophe all on its own.
The history of the Satoshi Action Fund is unconventional, to say the least. Ms. Gunasekara, its co-founder, gained notoriety in 2015 while working for Senator Jim Inhofe, Republican of Oklahoma, bringing him a snowball on the Senate floor while he argued that climate change was a hoax. She is married to a lobbyist who for years represented the oil industry (and who is also a co-founder of the fund), and has railed against what she calls the left’s “woke” climate agenda. Last year, the Mississippi Supreme Court disqualified her in an election for a utilities regulatory board because she did not meet residency requirements.
Before launching the fund in 2019, Ms. Gunasekara worked as a senior adviser to Scott Pruitt, the first E.P.A. administrator under Mr. Trump. After she returned to the E.P.A. in 2020 as chief of staff to Mr. Pruitt’s successor, Andrew Wheeler, the fund appeared to languish, changing its name from the Energy 45 Fund to Energy Moms and then to Alliance for Energy Workers. Legal experts who reviewed the group’s tax filings during those years described them as slapdash and containing obvious contradictions. The group reported to the I.R.S., for instance, that its board of directors had zero members—but then, on the same form, reported that it had documented every meeting the board held.
I’ve seen stick-up kids with more sophisticated business plans.
It is unclear if Ms. Gunasekara and her old E.P.A. boss went into business; neither she nor Mr. Pruitt responded to requests for comment. But nearly a year later, Ms. Gunasekara, her husband and Mr. Porter repurposed the nonprofit as the Satoshi Action Fund, focused on Bitcoin and mining operations in particular. (Satoshi is the pseudonym associated with the unknown inventor of Bitcoin.) One of the fund’s purposes, Ms. Gunasekara said during a speech announcing the organization, is to tell the “very good stories” that Bitcoin mining has to offer, including the “role of rural revitalization.”
A scam to enable a scam to promote a scam. When you get to the third level of the scam, it’s time to stop digging, even metaphorically.
Charles P Pierce is the author of four books, most recently Idiot America, and has been a working journalist since 1976. He lives near Boston and has three children.
