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Senate Finance Committee Chairman Questions Crypto Miners’ Use Of Opportunity Zones

Bitcoin is so far the most popular choice for crypto miners.

Senate Finance Committee Chairman Ron Wyden has expanded his probe into the opportunity zone program to include the possible involvement of cryptocurrency mining operations.

Wyden, a Democrat from Oregon, asked Argo Blockchain and Redivider Blockchain in letters to the cryptocurrency companies for details about the opportunity zone projects they are involved in, including where they are, how much has been invested in them and how the projects came about, among other information. 

"The lack of safeguards and transparency measures in the Opportunity Zone program raise the possibility that taxpayers are simply subsidizing companies involved in cryptocurrency mining," Wyden said in the letters.

Crypto mining has tripled in the U.S. just over the past year. The supply of bitcoin, for example, the most popular and valuable of all cryptocurrencies, is finite, which has led bitcoin miners to build up their mining networks to find the last bitcoins using large amounts of energy-hungry computing power.

Wyden launched an investigation of OZs in January, stating that the program may permit wealthy investors to avoid taxes without benefiting the distressed communities the program was intended to help. 

In kicking off the probe, the senator cited a late 2021 Government Accountability Office report that found that several opportunity zone funds would have proceeded with projects in OZs without the tax incentives provided by the program.  

Nearly all of the opportunity zone funds examined by GAO were focused on real estate development projects, including one in Las Vegas that will provide on-site gaming and another to develop climate-controlled self-storage units. 

A separate GAO report in 2020 found that the data currently collected on the program isn't enough to assess whether the OZs are creating jobs. The later report reiterated that point.