The US Securities and Exchange Commission (SEC) has clarified its position regarding proof-of-work (PoW) mining, determining that Bitcoin (BTC) mining activities are not categorized as securities trading under US law.
This long-anticipated announcement delivers crucial clarity for crypto miners and the wider blockchain community, affirming that mining activities on open, permissionless networks are exempt from securities regulations.
A New Chapter For Bitcoin And Dogecoin Miners
The SEC’s ruling is anticipated to have significant consequences for major cryptocurrencies such as Bitcoin and Dogecoin (DOGE), both of which utilize the PoW consensus mechanism to validate transactions and append new blocks to their corresponding blockchains.
In a declaration released on Thursday, the SEC’s Division of Corporation Finance addressed inquiries related to “Protocol Mining,” concluding that these endeavors do not constitute the “offer and sale of securities” under the Securities Act of 1933.
“It is the Division’s perspective that ‘Mining Activities’ do not involve the offer and sale of securities, as defined in Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Securities Exchange Act of 1934,” the SEC observed.
This finding implies that individual miners and mining collectives involved in these activities are not obligated to register transactions with the Commission under the Securities Act, nor do they need to qualify for any exemptions from registration.
Trump Era Regulations
The SEC’s determination is particularly crucial for miners dedicating substantial resources to computational power and energy expenses to secure blockchain networks.
The ruling enables both independent miners and mining collectives—where multiple miners aggregate their resources to enhance their chances of earning rewards—to conduct their operations without the encumbrance of regulatory ambiguity.
While the SEC did not mention specific blockchains in its announcement, the ruling effectively pertains to prominent PoW networks such as Bitcoin and Dogecoin.
The Commodity Futures Trading Commission (CFTC) has previously categorized these assets as commodities instead of securities, further reinforcing the regulatory framework for these cryptocurrencies.
This clarification emerges amidst a transformation in the regulatory landscape during the tenure of US President Donald Trump, who has positioned himself as a pro-crypto advocate.
Trump’s administration has sought to establish the US as a global center for blockchain and digital assets, forming the Council of Advisers on Digital Assets to create industry-supportive regulations.
The SEC’s affirmation that PoW mining does not equate to securities trading may enhance confidence among investors and miners alike, indicating a shift towards clearer and more advantageous regulations in the cryptocurrency sector.
At the moment of writing, Bitcoin is valued at $83,875, reflecting a downturn of up to 13% over the monthly period.
Featured image from Shutterstock chart from TradingView.com
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