A US Federal Judge in Little Rock has temporarily halted Arkansas State’s efforts to shut down a crypto mining firm owned by a Chinese-born man. The ruling comes after the firm requested a Temporary Restraining Order (TRO) claiming illegal discrimination.

Chief US District Judge Kristine Baker issued a temporary restraining order amid the legal battle between the Arkansas state and crypto mining firm Jones Eagle LLC. Arkansas Advocate reports that the firm’s lawyers requested the TRO, which the Federal Judge granted on November 25, and a preliminary injunction, yet to be approved.

The TRO temporarily stopped Arkansas officials from enforcing two laws, Act 636 of 2023 and Act 174 of 2024, that target businesses and property owned by Chinese nationals. Act 636 prohibits property ownership in the state by companies or individuals linked to the Chinese government and other countries considered US adversaries.

Meanwhile, Act 174 prohibits the ownership of “foreign-party-controlled” interests linked to the countries listed in Act 636. These laws give the state agriculture department the authority to investigate entities suspected of violating these rules and direct the Attorney General to act against them.

Based on these laws, Arkansas Secretary of Agriculture Wes Ward referred the crypto mining company to Attorney General Tim Griffin in December 2023, claiming that Jones Digital LLC, the previous name of Jones Eagle, may have significant ties to China.

The attempt to enforce Act 636 and Act 174 against the crypto company is based on its owner’s Chinese origin. Qimin “Jimmy” Chen, a Chinese-born man who resides in New York, controls Jones Eagle through Eagle Asset Holdings Inc., owner of the majority stake in the mining firm.

However, Court documents highlight that Chen immigrated to the country as a child and is a naturalized US citizen.

The TRO is effective for 14 days, after which a court hearing will be held to discuss the preliminary injunction request and possibly extend the restraining order. Alex Jones, Chen’s attorney, stated:

The TRO and the preliminary injunction will prevent further harm to our client while we prepare for a trial on the merits where we will get to fully present our case as to why the laws are unconstitutional and reflect legislative overreach.

The crypto mining firm filed a lawsuit on November 13 against the state of Arkansas, Ward, and Griffin, citing a violation of the Fourteenth and Fifth Amendments to the US Constitution.

The lawsuit argues that the two laws violate the US Constitution by “denying due process, illegally discriminating against a person based on national origin, and depriving a person of just compensation for taking property.”

In a statement attached to the company’s TRO request, Chen alleges that he has tried cooperating with the state authorities but hasn’t received a positive answer.

Per the report, Chen provided the attorney general with the documents showing the firm operates on leased land. Additionally, he has allegedly attempted to meet with the attorney general’s staff to present proof of his US citizenship but “has been refused.”

Ultimately, Chen argues that the investigation was based solely on his Asian name and alleges he filed the lawsuit because “he believes the attorney general is prepared to take steps against his company that will further harm his business and reputation.”

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