The US Securities and Exchange Commission (SEC) has clarified its stance on proof-of-work (PoW) mining, ruling that Bitcoin (BTC) mining activities don’t fall under the definition of securities trading as per US law.
This long-awaited statement provides essential clarity for crypto miners and the broader blockchain community, confirming that mining operations on public, permissionless networks will not be subject to securities regulations.
A Recent Era For Bitcoin And Dogecoin Miners
The SEC’s decision is predicted to have substantial implications for leading cryptocurrencies like Bitcoin and Dogecoin (DOGE), each of which depend on the PoW consensus mechanism to validate transactions and add recent blocks to their respective blockchains.
In a statement issued on Thursday, the SEC’s Division of Corporation Finance addressed concerns regarding “Protocol Mining,” concluding that these activities don’t involve the “offer and sale of securities” as defined under the Securities Act of 1933.
“It’s the Division’s view that ‘Mining Activities’ don’t involve the offer and sale of securities throughout 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 noted.
This determination signifies that individual miners and mining pools engaged in these activities will not be required to register transactions with the Commission under the Securities Act, nor do they should fall inside any exemptions from registration.
Trump Era Regulations
The SEC’s ruling is especially necessary for miners who invest significant resources into computational power and energy costs to secure blockchain networks.
The choice allows each solo miners and mining pools—where several miners mix their resources to extend their probabilities of earning rewards—to proceed their operations without the burden of regulatory uncertainty.
While the SEC didn’t specify particular blockchains in its statement, the ruling effectively applies to major PoW networks like Bitcoin and Dogecoin.
The Commodity Futures Trading Commission (CFTC) has previously classified these assets as commodities reasonably than securities, further solidifying the regulatory landscape for these cryptocurrencies.
This clarification comes amidst a shift within the regulatory environment under US President Donald Trump, who has positioned himself as a pro-crypto leader.
Trump’s administration has aimed to make the US a worldwide hub for blockchain and digital assets, establishing the Council of Advisers on Digital Assets to develop industry-friendly regulations.
The SEC’s confirmation that PoW mining doesn’t constitute securities dealing may bolster confidence amongst investors and miners alike, signaling a move towards clearer and more favorable regulations within the cryptocurrency space.
On the time of writing, Bitcoin trades at $83,875, recording losses of as much as 13% within the monthly time-frame.
Featured image from Shutterstock chart from TradingView.com
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