Appellate Judge Questions Broad Injunction on Arkansas Crypto Mining Law
An appellate judge criticized the lower court's broad injunction against Arkansas’ crypto mining law.
Why it matters: This case affects regulatory authority over crypto mining and foreign investment restrictions, key for fintech and energy legal advisors.
- Arkansas Act 174 (2024) bans ownership in crypto mining by individuals from U.S.-restricted countries like China and Iran.
- A 2025 federal court injunction blocked Act 174, citing federal preemption and foreign policy conflicts.
- On October 20, 2026, Judge James Loken called the injunction "way overbroad" and suggested lifting it.
- Arkansas argues the law protects state police powers and aligns with federal national security interests.
In 2024, Arkansas enacted Act 174, which prohibits citizens and businesses from countries subject to U.S. arms export restrictions—such as China, Iran, North Korea, and Venezuela—from owning interests in local digital asset mining operations. The Arkansas Cryptomining Association challenged this law in 2025, asserting the state overstepped by intruding into foreign policy and discriminating based on national origin.
A federal district court issued a preliminary injunction in 2025, blocking enforcement of Act 174 due to concerns about federal preemption and conflicts with national foreign policy. However, during appellate arguments on October 20, 2026, U.S. Circuit Judge James Loken sharply criticized this injunction, describing it as "way overbroad" and suggesting it should not stand.
Judge Loken commented, "You're saying, 'we asked for a slice of bread, and the district court gave us the full loaf.'" Arkansas officials, represented by attorney Joseph Nelson, defended the law as a valid exercise of the state's police powers, emphasizing it regulates property ownership and protects public welfare while aligning with federal national security measures.
The Arkansas Cryptomining Association countered that Act 174 risks undermining federal foreign policy by diminishing federal leverage in international negotiations and targeting minor investments that federal authorities would not prioritize.
This dispute highlights ongoing tensions between state regulatory ambitions and federal authority over foreign investment, with potential ramifications for future crypto mining operations and foreign ownership restrictions at the state level.
By the numbers:
- 2024 — Year Arkansas enacted Act 174 restricting foreign-owned crypto mining
- 2025 — Federal court blocked Act 174 with a preliminary injunction
- October 20, 2026 — Date of appellate arguments where injunction scope was questioned
Yes, but: The appellate court's final ruling on whether to lift or modify the injunction remains pending, leaving uncertainty for stakeholders.
What's next: The appeals court's forthcoming decision will clarify whether Arkansas can enforce its restrictions, potentially setting a precedent for state-level crypto mining regulations.