A federal judge in Little Rock has temporarily blocked enforcement of a pair of state laws against a cryptocurrency mining operation in an Arkansas county that the state is investigating over concerns of foreign ownership.
on monday, judge christine baker The state has issued a temporary restraining order preventing the state from enforcing Act 636 of 2023 and Act 174 of 2024 against cryptocurrency mining company Jones Eagle or its owners. Kimin “Jimmy” Chen.
Chen is a naturalized American citizen who was born in China and immigrated to the United States as a child, according to a lawsuit he filed earlier this month. The lawsuit says he controls Jones Eagle's operations through his ownership in another company, Eagle Asset Holding. Chen has a “controlling interest” in the company and lives in Brooklyn, New York, the filing said.
Last year, the Arkansas State Legislature and Governor Sarah Sanders Enacted laws restricting land ownership by foreigners, including ownership by people from countries subject to certain regulations by the U.S. Department of State. The list, known as the International Traffic in Arms Regulations (ITAR), includes about 20 countries, including China, Afghanistan and Iran.
This law led the state of Arkansas Attorney General Tim Griffin It took action against Syngenta Seed Co., which owned land in Craighead County. The business is owned by a subsidiary of the state-owned China National Chemical Corporation (ChemChina). Griffin ordered the company to sell the land in Arkansas within two years or the state would take the company to court. The company was also forced to pay a $280,000 fine.
Earlier this year, Congress and Sanders enacted another law focused on the cryptomining industry that would place similar restrictions on ownership by individuals in ITAR-designated countries.
June, Arkansas Secretary of Agriculture Wes Ward Mr. Griffin asked that a property in Fort Smith near Ebbing Air National Guard Base be investigated because its owner may have ties to the Chinese Communist Party. As it turned out, the property was owned by Olivet International, a Wal-Mart supplier with Taiwanese executives. (A letter sent by Mr. Ward to Mr. Griffin appeared to confuse the Republic of China, an ally of the United States, with the communist-controlled People's Republic of China.) In August, Mr. Griffin He acknowledged that the business has no connection to China.
Sanders said he warned Griffin in December 2023 that two companies, Jonesboro Heavy Equipment Company and Jones Digital, the predecessor to Jones Eagle, may be in violation of Act 636.
In a letter to Griffin, Ward said Jones Digital may have “significant relationships with China” and that Jones Digital LLC “has other operations under different names in other parts of the state.” “They may also have significant ownership interests in digital assets and cryptocurrency mining operations.”
Jones Eagle filed a lawsuit against Griffin, Ward and the state of Arkansas earlier this month. The plaintiffs argued in the lawsuit that both state laws are unconstitutional and discriminatory. Among other arguments, the plaintiffs also said that Act 636 did not apply because Jones Eagle's lease was for less than 10 acres and did not meet the law's definition of agricultural land.
Baker said in this week's ruling that Jones Eagle will likely prevail on the merits. Baker is scheduled to hold a hearing on the temporary restraining order on Monday.
Last year, a federal judge Lee Rudofsky Granted Jones Digital's request for a preliminary injunction in a lawsuit involving an Arkansas County ordinance that sought to limit noise emitted by cryptocurrency mines. This case, unlike the pre-Baker case, did not mention ownership of the business.
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