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- Crypto mining company NewRays One has sued Faulkner County, Arkansas, claiming it is unfairly targeting their business
- NewRays argues that a new ordinance is driven by racial and national origin bias and harms its business
- The lawsuit asserts that the ordinance was enacted due to anti-Chinese sentiment and aims to discriminate against NewRays’ business based on its perceived foreign ties
Crypto mining company NewRays One has filed a lawsuit against Faulkner County, Arkansas, challenging the enactment of a new ordinance which imposed strict noise limits and zoning restrictions. NewRays claims that Ordinance 23-20 was primarily aimed at data centers like NewRays and was used as an excuse to curb its operations. According to the complaint, the ordinance discriminates against NewRays based on perceived foreign involvement and violates both federal and state law, including constitutional protections.
Ordinance 23-20 “Facially Discriminates” Against Operations
The lawsuit filing lays out NewRays’ grievance, explaining how it purchased property in Faulkner County in 2022 to establish a data center for cryptocurrency mining. In response to growing concerns about noise and foreign involvement, Faulkner County introduced Ordinance 23-20 , which imposed strict noise limits and zoning restrictions aimed primarily at data centers like NewRays. This ordinance was passed on July 19, 2023 .
NewRays claims the ordinance “facially discriminates against data centers and cryptocurrency mining operations,” pointing out that the ordinance does not apply to other businesses producing similar or greater noise levels. Moreover, NewRays alleges that local officials, including County Attorney Phil Murphy, openly admitted to intentionally discriminating against their operation when he stated, “Yes, it does discriminate. We are intentionally discriminating in this case.”
The Role of Anti-Chinese Sentiment
According to NewRays, much of the push to enact Ordinance 23-20 was fueled by anti-Chinese sentiment in the local community. The complaint highlights various instances where county officials and citizens expressed concerns about “foreign involvement” in the company, particularly because of its ties to Chinese nationals.
Secure Arkansas , a group known for spreading anti-Chinese rhetoric, circulated newsletters warning about Chinese influence in the county. The lawsuit quotes one disturbing remark made during public discussions: “Where’s the Klan when you need them?”.
Legal Arguments
NewRays’ claims rest on several key points. First, they argue that Ordinance 23-20 violates the Equal Protection Clause of the U.S. Constitution, as it intentionally discriminates against their business based on perceived foreign involvement. They also assert that the ordinance constitutes a taking without just compensation , in violation of the Fifth Amendment , because it restricts NewRays’ use of their property without offering compensation. Furthermore, NewRays claims that the county lacks the legal authority to enact such restrictions and that the ordinance contradicts state law, including the recently enacted Arkansas Data Centers Act of 2023.
The matter is now with the federal court, with NewRays seeking to invalidate Ordinance 23-20 and halt its enforcement. The company’s lawsuit paints a picture of local government overreach, driven by xenophobic sentiment, and supported by discriminatory regulations.
The case will now move forward in the U.S. District Court for the Eastern District of Arkansas, where NewRays aims to protect its business interests and challenge the constitutionality of the ordinance.