Major financial institutions on Wall Street should be held responsible for bankrolling the emissions-heavy Bitcoin mining industry, according to a new report by Greenpeace USA.

The report, titled “Bankrolling Bitcoin Pollution: How Big Finance Supports a New Climate Threat” from the environment-focused nongovernment organization (NGO), differs from previous Greenpeace papers on the Bitcoin (BTC) mining industry.

In the report, the main characters are not BTC miners themselves but Wall Street and the banking industry.

Greenpeace claims that big finance supports Bitcoin mining by creating economic incentives, thereby continuing the ecological threat the industry represents.

The report names Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard and MassMutual as the top five financiers of carbon pollution from Bitcoin mining companies.

According to the report, they together accounted for over 1.7 million metric tons of carbon dioxide (CO2) in 2022 — equal to the emissions of over 335,000 American homes using electricity for a year.

Greenpeace stated that Bitcoin mining has grown into a large commercial industry, where companies need access to significant capital to build facilities and purchase computing equipment.

Miners rely on support from banks and asset managers, with Wall Street and the banking industry heeding the call, eager for their share of the spoils.

The report says companies such as BlackRock should be accountable for fostering the mining industry:

“Banks and asset managers have a duty to disclose risks to their shareholders and clients who are currently missing vital information on the climate risks from Bitcoin.”

Greenpeace criticizes the lack of scrutiny of how investments from traditional finance companies enable carbon-intensive Bitcoin mining operations.

Greenpeace also states that the crypto mining industry lacks disclosure and transparency, which “enables Bitcoin mining companies to avoid accountability and obscures the scale of Bitcoin’s climate problem.”

This “lack of reputable electricity and emissions reporting” makes it hard for investors, stakeholders and regulators to make informed decisions if they wish to follow green policies.

The NGO believes financial companies involved in Bitcoin mining should report on the emissions associated with their investments and underwriting services for Bitcoin mining companies.

Greenpeace says Wall Street is financing climate change

Greenpeace said it is hypocritical that banks have green, sustainability goals on their agenda but also invest in or finance the crypto mining industry.

In the United States, Texas has become a global hub for Bitcoin miners, absorbing a significant number of miners who abandoned China after its mining ban.

Greenpeace accuses Wall Street companies of financing this new gold rush, which resulted in the construction of many BTC mining facilities. The report highlighted the case of Riot Platforms’ facility near Rockdale. According to Greenpeace 2022 estimations, the mining facility output the largest carbon emissions.

The Riot facility’s main financiers were Vanguard, BlackRock, Morgan Stanley and State Street.

Citing data from the Cambridge Bitcoin Electricity Consumption Index (CBECI), Greenpeace said that the Riot facility alone accounted for 526,000 metric tons of CO2, equivalent to the carbon emitted from 100,000 U.S. homes a year.

Greenpeace highlighted the paradox of BlackRock, which is a supposed leader in sustainable investment.

The NGO emphasized that BlackRock is a signatory to the Net Zero Asset Managers initiative, which includes pledging to support net zero emissions by 2050 in line with efforts to limit global warming to 1.5°C.

However, among the 540 financial institutions in Greenpeace’s study, BlackRock had the third-highest carbon emissions from its investments in Bitcoin mining.

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Greenpeace also said that companies with a low reputation for supporting cryptocurrencies, such as the publicly traded companies M&T Bank and MassMutual, issued loans to miners in 2022.

MassMutual lent $100 million to BTC miner Core Scientific, financing over 250,000 metric tons of CO2. M&T lent $174 million to build Terawulf facilities, producing 31,800 metric tons of CO2.

Johanna Fornberg, the senior research specialist at Greenpeace USA, said that “top financiers like BlackRock, Vanguard and MassMutual are enabling this carbon nightmare and avoiding disclosure or accountability of how this fits into their climate goals.”

Bitcoin miner greenwashing follows the tobacco industry

Greenpeace accused the Bitcoin industry of “making false and greenwashing claims regarding Bitcoin’s environmental impact” by asserting that the supposed environmental and social benefits are boosting the renewable energy transition and aiding the energy grid.

The report compared the Bitcoin industry strategy to “a playbook from the tobacco and fossil fuel industry.” The NGO accused Bitcoin mining leaders of publishing “misleading studies in predatory scientific journals” written by industry representatives “in an attempt to paint a green image.”

Greenpeace claims that many of these papers are “commonly written by people who work for Bitcoin mining companies or trade associations with blatant conflicts of interest” and are submitted to journals known for their poor peer-review processes. Once published, the industry sells these papers to the public as rigorous science.

The articles allege that Bitcoin’s energy-intensive mining is good for the environment by incentivizing the purchase of stranded renewable energy and providing stability to power grids. However, Greenpeace believes these ideas are either “speculative, contested, or false.”

Additionally, Greenpeace claims that some Bitcoin miners are reducing their carbon footprint artificially by “purchasing Renewable Energy Credits (RECs) and reporting ‘market-based’ emissions based on RECs and carbon offsets.”

In this way, they claim a higher usage of renewable energy and display lower carbon emissions.

Many companies use RECs; however, Greenpeace said that these market-based instruments are “notoriously unregulated and often do little or nothing to cut carbon emissions or spur renewable energy development.”

BTC miner tax or scrapping proof-of-work (PoW)

Greenpeace believes that regulation and taxation must be used to “eliminate the huge appetite for energy” from Bitcoin miners. It states that the U.S. needs “policies that make miners pay for the environmental, social, and economic costs of their operations.”

The NGO agrees with the taxation attempts of U.S. President Joe Biden’s administration embodied within the Digital Asset Mining Energy (DAME) tax. Greenpeace stated that the tax could “incentivize miners to clean-up their operations.”

For the crypto industry, Biden’s tax proposal is a clear attempt to kill the American crypto mining industry. Senator Cynthia Lummis, who was one of the senators behind the bipartisan vote for the SAB 121 repeal, said on X:

The U.S. elections are only five months away, and crypto regulation has become a topic of discussion in political campaigns. 

Former President Donald Trump is positioning himself as the pro-crypto candidate, supporting BTC miners in the pursuit of producing Bitcoin “made in the USA.” On the other hand, Biden’s anti-crypto stance could cost him votes in some swing states, which could cause the president to rethink his strong position against crypto.

Aside from tax, Greenpeace has introduced another route for Bitcoin mining to remain in the United States. Following its controversial Change the Code campaign, it advocated for Bitcoin to change its consensus protocol from proof-of-work to proof-of-stake (PoS), as Ethereum has done.

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The Bitcoin community and developers vehemently oppose this option, saying it would destroy the decentralized form of money it represents, thereby preventing Bitcoin from remaining “sound money.”

There have been attempts to fork Bitcoin with a PoS algorithm, but as its price graph demonstrates, the community hasn’t supported it.

Greenpeace’s claim that Bitcoin miners employ deceptive tactics to influence public opinion could ignite conflict in the cryptocurrency community. 

This friction echoes the response to Greenpeace’s recent report, “Mining for Power,” which the Bitcoin community criticized for its perceived one-sided perspective and potential conflict of interest, given that the Change the Code campaign is directly funded by Ripple co-founder Chris Larsen.