Norway regulators clamp down on crypto mining via new law

Regulators in Norway are looking to clamp down on cryptocurrency mining via a new law for data centers operating in the nation.

According to a report from local media VG, the new framework will mandate that data centers register officially and provide information about those involved, like owners and leaders, and the type of services they offer. The legislation will be the first of its kind, making Norway the first European nation to regulate the data center industry.

“The purpose is to regulate the industry in such a way that we can close the door on the projects we do not want,” said Digitalization Minister Karianne Tung.

The new legislation is designed to enhance local government officials’ oversight of data centers, enabling them to make more informed decisions about approving or rejecting their operations. Regulators believe that this law will significantly improve the management of local data infrastructure.

Further, the regulators also clarified that they aren’t in favor of crypto-mining operations. Minister for Energy Terje Aasland expressed concerns regarding the greenhouse gas emissions associated with the cryptocurrency mining process.

“It is associated with large greenhouse-gas emissions and is an example of a type of business we do not want in Norway,” Aasland said, adding that they are not interested in businesses that are looking to extract cheap electricity.

Norway is Europe’s largest hydropower producer, with renewable energy sources accounting for the majority of the country’s electricity. As such, the nation has become a budding hub for cryptocurrency miners in recent years due to the low electricity costs in the region. Per a 2023 report, mining firms in Northern Norway, where electricity is the cheapest, cumulatively used as much electricity as the district of Lofoten.

At the moment, the number of Bitcoin mining firms operating within the nation is unknown to the regulators. However, the new law will offer more clarity on the matter and help carry out Norway’s border digitalization plans, according to Tung.

The increased scrutiny from Norway comes as the broader crypto-mining economy has seen dwindling performance.  Stocks of some major Bitcoin mining firms, like Marathon Digital Holdings and Riot Platforms, have continued to drop over the past few weeks.

The developments come as the crypto industry is set to witness the fourth Bitcoin halving this week. According to 10x Research Head Markus Thielen, Bitcoin miners could liquidate $5 billion worth of the flagship asset to remain profitable post-halving.