BY JEFF CHUDZINSKI
North Country This Week

MASSENA — Town officials are set to hear arguments for and against crypto mining operations in the town during a public comment period during the board’s next meeting on Wednesday, Feb. 16 at 5:30 p.m.

Public comment will also be heard for a seeker on a parcel located in the residential agricultural zone that may be rezoned for industrial use.

Town officials had previously approved a 90-day moratorium that was set to expire Nov. 30, 2021 but decided to extend the moratorium an additional 90 days. The extension on the moratorium is set to expire Feb. 28 unless officials vote for a second extension.

Officials had cited concerns over the potential use of sea box shipping containers as buildings to house future crypto-mining operations, saying the containers are an eyesore.

Code enforcement officials have worked in conjunction with town attorney Eric Gustafson on the various code and planning regulations necessary to ensure such containers are not used in the future.

Residents will have an opportunity to weigh in Feb. 16 during the public comment period, offering residents a chance to voice concerns surrounding the surge in new crypto mining businesses and pending regulations for such businesses.

Data collection companies typically mine for cryptocurrency and various other data for monetary gain but historically offer little in the way of economic impact through full-time, permanent jobs.

One such business interested in settling in the town is Block Scheme LLC, founded by Russian national Sergey Karpenko.

Block Scheme LLC is a domestic limited liability corporation registered to an address in Palo Alto, California, according to the California Secretary of State. Karpenko incorporated Block Scheme on July 25, 2019 and is listed as the only managing-member.

Prior to his business dealings in Massena, Karpenko incorporated 15 other corporations, LLCs and non-profit organizations in five states, as well as the District of Columbia.

The businesses are involved in a number of ventures, ranging from real estate sales to data mining, trucking and transportation, as well as telecommunications and cybersecurity.

Prior to the initial moratorium, Karpenko had received site plan approval for an existing property located in the residential-agricultural zone, though during a town board meeting held in November he sought approval to remove the existing structure.

In his proposal presented to the town board, Karpenko explained he wanted to use the aforementioned sea boxes for a new structure, citing safety concerns as the reason for the change.

Karpenko argued that because he had received approval to conduct business in the town prior to the moratorium, he should be allowed to remove the structure and implement a new one, based on the pre-existing code, which would allow the use of sea boxes as his plans showed.

“As far as the board is concerned, this isn’t something we can take an action on. You really need to go through the planning board before any further action can be taken,” former Town Supervisor Steve O’Shaughnessy told Karpenko in November.

The town board declined to take action on the proposal, suggesting Karpenko work with the planning board for full site plan approval. Due to the nature of the moratorium, planning board officials also declined to take action and stated no work could be done on the location until the moratorium had been lifted.

Karpenko then sought a variance to have the structure and parcel rezoned to industrial, allowing for another building type to be constructed on the parcel while he waited for the moratorium to expire. Officials moved a step further for a State Environmental Quality Review (SEQR) to review the potential impact the change in zoning could have on the environment and community.

Planning board officials spoke against the attempt to rezone the property during January’s board meeting, highlighting the quiet nature of the neighborhood.

Both Vance Fleury and Shawn Burke, members of the town planning board, spoke out against the proposed changes, citing noise levels and traffic in the area as concerns. Burke went a step further, suggesting Block Scheme LLC should utilize existing industrial properties that are properly zoned.

“This property is nearly five miles from the industrial zone, it’s not like it’s industrial adjacent. This property also shares boundaries with residential properties,” Burke said during the January board meeting.

In documents sent to the planning board, Karpenko described Block Scheme LLC as a data mining company, in an effort to circumvent the language used in the moratorium.

According to documents from the California Secretary of State, Block Scheme LLC is listed as a cryptocurrency mining company.

“He can call it what he wants, but it’s a crypto mining operation,” Burke said in January.

Officials from the town could not be immediately reached for comment at this time.