A North Carolina-based cryptomining company, NewRays One LLC, has filed a federal lawsuit against Faulkner County, Arkansas, alleging that a local noise ordinance unfairly targeted its operations due to anti-Chinese sentiment. The lawsuit, which names several county officials including County Judge Allen Dodson and Sheriff Tim Ryals, claims the ordinance was passed specifically to hinder the company’s cryptomining activities.
NewRays began operations in Bono, an unincorporated area of Faulkner County, in May 2023, after purchasing land in October 2022. According to the company, there were no local zoning restrictions at the time to regulate noise or limit their operations. However, shortly after they commenced operations, the Faulkner County Quorum Court passed Ordinance 23-20, which limits noise levels from data centers to 60 decibels during daytime hours and 55 decibels at night.
At the heart of the dispute is the noise generated by NewRays’ cryptomining facility, which, according to sound measurements taken in May, exceeded the county’s legal limit by 3.4 decibels during nighttime hours. NewRays contends that the ordinance, passed in July 2023, was specifically designed to target its operations.
The complaint claims that the ordinance was a direct response to noise complaints from local residents and was part of a broader wave of anti-Chinese sentiment in Faulkner County. NewRays alleges that prior to the ordinance’s passage, a group called “Secure Arkansas” circulated multiple newsletters with xenophobic rhetoric. These newsletters, with titles like “How the Communist Chinese are Hijacking America, Locally,” were allegedly distributed to county officials and played a significant role in shaping the ordinance.
“That anti-Chinese sentiment targeted NewRays because of the perceived race, national origin, and ethnic identity of NewRays’ agents, employees, and related persons,” the company stated in its complaint. They argue that the ordinance was deliberately structured to target their facility while avoiding restrictions on other data centers in the county, such as Axciom in Conway.
Noise from cryptomining operations has become a growing concern in communities across the U.S. and globally. A 2022 article from Bitcoin Magazine noted that the noise from these facilities scales logarithmically, meaning that as more machines are added, the noise can reach levels comparable to that of a busy nightclub. Cryptomining operations, which require significant cooling, often rely on noisy fans to maintain equipment temperatures, contributing to elevated noise levels in surrounding areas.
Despite these concerns, NewRays contends that their operations comply with broader guidelines for cryptomining facilities and that the county’s ordinance unfairly singles them out. They point to the passage of Arkansas Act 851 in 2023, which aimed to protect data miners from discriminatory local regulations, and claim that Faulkner County acted in bad faith by enacting its ordinance before Act 851’s effective date.
The lawsuit also highlights the broader implications of targeting foreign-owned businesses, particularly those involved in emerging industries like cryptocurrency. “Our business was unfairly singled out, not because of what we do, but because of who we are perceived to be,” the complaint reads.
NewRays is seeking a preliminary injunction to block enforcement of the noise ordinance. The hearing for the injunction is scheduled for Friday before U.S. District Judge Lee Rudofsky.
This case marks the latest in a series of legal battles between local communities and cryptomining companies, as the rapid growth of the industry continues to stir debate over environmental impacts, energy consumption, and noise pollution. As cryptomining operations expand into new regions, conflicts with local governments and communities may become increasingly common.
