The Division of Corporation Finance at the US Securities and Exchange Commission has provided insights regarding proof-of-work mining, stating that such endeavors do not equate to “the offer and sale of securities” as specified in the Securities Act of 1933, provided they adhere to specific criteria.
In a statement released on March 20, the agency addressed the “mining of crypto assets that are fundamentally connected to the operational functions of a public, permissionless network” and concluded that decentralized proof-of-work networks should not be classified as securities.
While the statement did not identify particular blockchains, the agency’s position on certain proof-of-work activities pertains to permissionless networks where mining is involved in the consensus process. This applies to both individual miners and mining pools within such frameworks.
The Division of Corporation Finance articulates its position on PoW “protocol mining activities.”
Bitcoin (BTC) remains the largest and most prominent proof-of-work blockchain, but others like Dogecoin (DOGE), Litecoin (LTC), and Monero (XMR) also exist. US regulators have consistently regarded Bitcoin as a commodity, not a security—a perspective that similarly applies to Litecoin and Dogecoin, as indicated by the Commodity Futures Trading Commission.
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A supportive environment for crypto policy
Under the leadership of President Donald Trump, digital asset markets, including proof-of-work chains, are poised for growth as he aims to position America as the global hub for blockchain and cryptocurrency.
In addition to nominating a pro-crypto successor to Gary Gensler at the SEC, the president has formed the Council of Advisers on Digital Assets to promote sensible regulations in the sector.
On March 19, Bo Hines, the council’s executive director, indicated that a comprehensive stablecoin bill might reach the president’s desk in the coming months.
That same day, the Blockchain Association announced that a cryptocurrency market structure bill is anticipated by summer. “I think we’re close to being able to get those done for August […] They’re doing a lot of work on that behind the scenes right now,” remarked Kristin Smith, the CEO of the Blockchain Association.
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