Arkansas Crypto Mining Ownership Law Goes Before the Eighth Circuit

On Tuesday, October 20, 2026, a three judge panel of the U.S. Court of Appeals for the Eighth Circuit heard Arkansas ask it to lift a federal court order that has blocked the state's crypto mining law, Act 174 of 2024. The panel did not rule from the bench, and the law stays blocked while the court decides.

I follow state mining laws closely because they reach past any single company. A permitting and ownership rule changes how sites are financed, who can hold equipment and land, and which agency an operator answers to.

What happened at the hearing

According to Courthouse News Service, the state was represented by attorney Joseph Nelson and the Arkansas Cryptomining Association by attorney Alexander Jones. The panel was Judges James Loken, David Stras and Bobby Shepherd.

Judge Loken questioned the scope of the lower court's order, which blocks the whole act and not just the ownership section. He called it "way overbroad" and said, "If the injunction is overbroad, it shouldn't stay in effect." Courthouse News reports that he also described blocking an entire law, rather than only the parts at issue, as an affront to the separation of powers.

Judge Stras raised the idea that federal policy may aim for a certain level of foreign investment, so a state rule that goes further could cut against it. On the association's view that federal policy favors investment, he said, "You may be right about the purpose, but it doesn't really show up anywhere." Courthouse News reported no comments from Judge Shepherd.

Crypto Briefing also reported that the court has not issued a decision and that a ruling on the injunction would not end the case, because a preliminary injunction is not a final judgment.

What Act 174 does

Act 174 sets up a permitting program for digital asset mining operations in Arkansas. Courthouse News describes most of the act as covering regulations, noise limits and utility protections. The Arkansas Oil and Gas Commission carries out the permitting side through a rule known as Rule K, according to the Arkansas Democrat Gazette.

The section at the center of the lawsuit bars what the law calls "prohibited foreign party controlled businesses" from holding any ownership interest in a mining operation in the state. Courthouse News says the covered parties include citizens and businesses tied to countries under federal arms export restrictions, such as China, Iran, North Korea and Venezuela.

How the case got here

The Arkansas Cryptomining Association, a trade group for mining companies, sued state officials on March 13, 2025, on behalf of two members, according to the Democrat Gazette. The members named in that report are Jones Eagle LLC, with a facility in Arkansas County, and NewRays One, with a facility in Faulkner County. The paper reported that both owners were born in China and are now naturalized U.S. citizens.

Chief U.S. District Judge Kristine G. Baker granted a preliminary injunction on April 29, 2025. The order bars Attorney General Tim Griffin, Oil and Gas Commission Director Alan York and those acting with them from enforcing Act 174 or Rule K "until further Order from this Court." Judge Baker found the association likely to succeed on its claim that federal law preempts the state law. She wrote that Act 174 and Rule K appear on their face to conflict with the federal scheme for national security review of foreign investment, known as FIRRMA, and that the act "sweeps more broadly" than federal law. She also ruled that the act and Rule K could not be split apart, which is why the whole law was blocked.

Jones Eagle has a separate case against the state from 2024. Judge Baker issued a temporary restraining order in that case on November 25, 2024, and a preliminary injunction about two weeks later, the Democrat Gazette reported. Attorney General Griffin said at the time that he would continue to defend Act 174 and planned to appeal.

What each side has said

Arkansas argues that controlling property ownership within its borders is a long held state power and that federal oversight of foreign investment does not fill the whole field. Nelson told the court that regulating property ownership "goes to the very heart of state police powers" and said the laws help keep mining facilities from straining local utilities, Courthouse News reported. The state also argued that any order cover only the actual plaintiffs and not the entire law.

The association argues that the state is setting its own foreign affairs and national security policy and cannot treat investors differently based on national origin. Its lawyer told the court the act reaches foreign investment of any size, including small stakes that federal review would not cover, and asked the panel to keep the injunction in place while the case moves forward.

What the industry is watching

• The scope of any ruling. The judges spent time on whether the order reaches too far by covering the whole act instead of only the ownership section. If the order is narrowed, the permitting, noise and utility parts of the law could take effect while the ownership fight continues.
• Permits under Rule K. Rule K's permitting program through the Oil and Gas Commission has been on hold along with the rest of the act. When and whether it starts depends on how the appeal comes out.
• Ownership and financing. Mining sites often involve several layers of owners, lenders, equipment owners and hosting customers. A rule that applies to "any" ownership interest raises questions about how far down those layers it reaches.
• Other states. Local and state rules on mining keep growing, from noise cases like the ones I covered in Granbury, Texas to the city rules discussed in Niagara Falls. How the Eighth Circuit treats a state ownership limit will be read closely by lawmakers elsewhere.

For readers who handle disputes involving mining sites, my bitcoin mining expert witness page describes the kinds of matters I am retained on.