By ANDY GARDNER

MASSENA -- A cryptocurrency mining firm that wanted to set up shop in Massena, Blockchain Industries, is backing away after the New York Power Authority imposed a moratorium on providing power to the industry. And a second firm, Coinmint, who had hoped to move into the former Alcoa East site, faces an uncertain future in town as a result.

Both companies would have required enormous amounts of electricity from NYPA. Cryptocurrency mining involves using powerful computers running online 24 hours a day, seven days a week, to solve complex math problems that encrypt and unlock the cryptocurrency on what's known as a blockchain. The unlocked and encrypted portions of the blockchain are then sold or traded as a commodity. Probably the most well-known form of cryptocurrency is Bitcoin. There are hundreds other varieties, such as LiteCoin and Ethereum.

“[These] companies are using extraordinary amounts of electricity — typically thousands of times more electricity than an average residential customer would use. While such a significant amount of electricity usage might go unnoticed in large metropolitan areas, the sheer amount of electricity being used is leading to higher costs for customers in small communities because of a limited supply of low-cost hydropower,” according to the New York State Public Service Commission.

A NYPA spokesman said as a result, the authority is putting the brakes on approving discount electricity for cryptocurrency mining until they know more about what they are getting involved with.

“The Power Authority has implemented, with Board of Trustees’ approval, a temporary moratorium on awarding economic development power to cryptocurrency mining businesses while NYPA develops a policy and procedures for interaction with the industry that are consistent with a unified state position,” Paul DeMichele from NYPA’s media relations department said in an emailed statement.

Blockchain officials said that outlook is contributing to their decision to step away from Massena.

"The climate surrounding distributed ledger technology varies greatly throughout the country and the world. We understand that each jurisdiction has to grapple with all the issues and make their own determination. We're looking to partner with jurisdictions that have vetted the issues and are reasonably comfortable with the partnership,” Lisa Moynihan, Blockchain Industries director of communications, said in an emailed statement. Company officials referred a request for a phone interview to her.

“We believe it's in everyone's best interest to step back and take a brief pause. If conditions permit a true public/private partnership that everyone is comfortable with, we would be happy to reengage at that time. This is a very politically charged issue and it would be inappropriate for us to play a large role into how it ultimately gets resolved,” Moynihan said.

Blockchain had approached the Massena Town Council in February to inquire about buying a parcel of town land on county Route 43. Company representatives said they were aiming to invest $600 million in a cryptocurrency mine and a call center and hire about 500 people to run both. According to a quarterly financial statement posted on the company’s website on March 19, they had $5,417,596 in total assets.

NYPA’s Board of Trustees has not received a recommendation to provide a power allocation under the Power Preservation program to Blockchain Industries, DeMichele said, adding that he cannot comment on pending applications. The program offers cut-rate electricity from the Moses-Saunders Power Dam in Massena to companies opening or expanding, along with investing capital and creating jobs. DeMichele said applications are usually reviewed internally and passed to the board for review and approval or denial.

Coinmint’s application was brought by NYPA staff to the authority's board on Jan. 30, DeMichele said.

“They (NYPA board) had some concerns and wanted to go back and better understand what we’re getting involved with,” he said.

Coinmint officials were not able to coordinate an interview time, according to John Collins, from New York City-based Mercury LLC.

He said his company is handling public relations for Puerto Rico-based Coinmint.

Coinmint’s website, www.coinmint.io, contains no information about the firm. When logging on, the only thing a visitor sees is a seven-second video that displays the company’s logo and the phrase “minting the future.” They also have a Twitter account that is scant on details.

A third company mining cryptocurrency, Skynet Digital, is already operating in Massena out of the R.E. Michael building in the Industrial Park. The company has not responded to requests for comment.