Arkansas Digital Asset Mining Business Ownership Restrictions

Arkansas Digital Asset Mining Business Ownership Restrictions refers primarily to Arkansas Code § 14-1-606, added by Act 174 of 2024. The statute became effective on May 3, 2024, through an emergency clause and targets certain foreign-party ownership interests in digital asset mining businesses operating in Arkansas. As of June 9, 2026, the statute remains codified, but enforcement of Act 174 and the related Oil and Gas Commission Rule K has been preliminarily enjoined by the U.S. District Court for the Eastern District of Arkansas pending further court action.

What the Arkansas mining ownership restriction covers

Act 174 was enacted as part of Arkansas’ broader rewrite of the Arkansas Data Centers Act of 2023 and its new permitting framework for digital asset mining businesses. For ownership purposes, the key provision is § 14-1-606, titled “Ownership of digital asset mining business by prohibited foreign-party-controlled business prohibited — Definitions — Penalty — Reporting.” The act defines an “interest” as an ownership interest greater than zero percent and defines a prohibited foreign-party-controlled business as a digital asset mining business in which a prohibited foreign party owns an interest.

The restricted category of “prohibited foreign party” includes several groups tied to countries subject to § 126.1 of the International Traffic in Arms Regulations as of January 1, 2024, foreign governments formed in those countries, certain entities organized under those governments’ laws, parties with significant interest or substantial control tied to those persons or governments, entities of particular concern designated by the U.S. Department of State, and agents or fiduciaries of covered persons or entities.

Ownership, divestment, and enforcement mechanics

Section 14-1-606 provides that a prohibited foreign party may not acquire or hold, by grant, purchase, devise, descent, or otherwise, any interest in a digital asset mining business in Arkansas. It also bars a person from acquiring or holding a digital asset mining business as an agent, trustee, or other fiduciary for a prohibited foreign-party-controlled business.

For covered businesses already operating before the effective date, Act 174 established a 365-day period for the prohibited foreign party to divest all interest in the digital asset mining business. The Attorney General may investigate suspected violations, including by receiving sworn statements and issuing subpoenas for witness testimony and records. If the Attorney General concludes that a violation occurred, the statute authorizes a divestment order and, after noncompliance, a circuit-court action.

Potential remedies include judicial foreclosure of the digital asset mining business, civil penalties up to $1 million or 25% of the fair market value of the prohibited foreign party’s interest, court costs, prejudgment and postjudgment interest, reasonable attorney’s fees, and treble damages if a court-ordered civil penalty is not paid. The statute also states that local approval, a state permit, or another authorization to operate is not a defense to an action under the ownership restriction.

Relationship to Arkansas mining permits and Rule K

Act 174 also created Arkansas Code Title 23, Chapter 119, which requires a digital asset mining business to operate with a valid permit from the Arkansas Oil and Gas Commission and directs the Commission to promulgate implementation rules. Those permitting provisions are legally distinct from the ownership restriction, but the same federal litigation has addressed Act 174 and Rule K together because the court concluded the challenged provisions were not severable at the preliminary-injunction stage.

Litigation status and CryptoSlate classification

In December 2024, the district court preliminarily enjoined enforcement of Act 174 against Jones Eagle LLC in litigation challenging Arkansas foreign-ownership restrictions. On April 29, 2025, in Arkansas Cryptomining Association v. York, the same court granted facial preliminary relief and enjoined the Arkansas Oil and Gas Commission director, the Arkansas Attorney General, and those acting in concert with them from enforcing any provision of Act 174 or Rule K until further order. The state officials noticed an appeal in May 2025. CryptoSlate should classify the law as an effective Arkansas act with enforcement preliminarily enjoined, rather than as repealed, expired, or struck down.