The US Securities and Exchange Commission (SEC) has clarified its position on proof-of-work (PoW) mining, determining that Bitcoin (BTC) mining activities are not classified as securities trading according to US legislation.
This anticipated announcement offers vital clarity for crypto miners and the broader blockchain community, confirming that mining activities on public, permissionless networks do not fall under securities regulations.
A New Chapter for Bitcoin and Dogecoin Miners
The SEC’s ruling is set to have considerable repercussions for major cryptocurrencies like Bitcoin and Dogecoin (DOGE), which both depend on the PoW consensus mechanism to authenticate transactions and incorporate new blocks into their respective blockchains.
In a statement made on Thursday, the SEC’s Division of Corporation Finance addressed issues regarding “Protocol Mining,” concluding that these activities do not entail the “offer and sale of securities” per the Securities Act of 1933.
“It is the Division’s view that ‘Mining Activities’ do not constitute the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Securities Exchange Act of 1934,” the SEC indicated.
This ruling implies that individual miners and mining pools engaged in such activities are not mandated to register transactions with the Commission under the Securities Act, nor do they need to qualify for any exemptions from registration.
Regulations from the Trump Era
The SEC’s decision carries significant importance for miners who invest substantial resources into computational power and energy expenses to secure blockchain networks.
The ruling enables both solo miners and mining pools—where multiple miners combine their resources to enhance their chances of earning rewards—to carry on their operations without the burden of regulatory ambiguity.
While the SEC did not mention specific blockchains in its statement, the ruling effectively caters to prominent PoW networks like Bitcoin and Dogecoin.
The Commodity Futures Trading Commission (CFTC) has previously categorized these assets as commodities instead of securities, reinforcing the regulatory framework for these cryptocurrencies.
This clarification emerges amidst a transition in the regulatory landscape under US President Donald Trump, who has positioned himself as a champion for cryptocurrency.
Trump’s administration has sought to position the US as a global center for blockchain and digital assets, establishing the Council of Advisers on Digital Assets to formulate industry-friendly regulations.
The SEC’s affirmation that PoW mining does not equate to securities trading may enhance confidence among both investors and miners, indicating a movement towards more transparent and favorable regulations in the cryptocurrency domain.
As of this writing, Bitcoin is trading at $83,875, reflecting losses of up to 13% in the monthly timeframe.
Featured image from Shutterstock chart sourced from TradingView.com.
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