- The SEC issued a statement clarifying that activities related to crypto mining do not qualify as securities offerings.
- This clarification might lead to an increase in the stock prices of Bitcoin mining companies.
- Paul Atkins, nominated by President Trump for SEC Chair, is scheduled to appear before the Senate Banking Committee next Thursday for his confirmation hearing.
The Securities and Exchange Commission’s (SEC) Division of Corporation Finance provided clarity on Thursday regarding proof-of-work (PoW) crypto mining. The announcement indicated that both individual miners and mining pools are not subject to US securities regulations, as they do not require a central organization or individual to generate revenue.
SEC clarifies that PoW mining profits do not qualify as securities
The SEC’s Division of Corporation Finance released a statement which explained its position on proof-of-work mining. The agency asserted that mining “Covered Crypto Assets” on public, open blockchains—like Bitcoin—does not amount to securities offerings.
Within the statement, the Division highlighted two primary categories of miners: solo miners and mining pools. These miners receive rewards by utilizing computing power to solve intricate cryptographic puzzles. The Division characterized their efforts as administrative or ministerial acts essential to protocol mining.
“By contributing their computational capabilities to a mining pool, the miner is simply taking part in an administrative or ministerial task that helps secure the network, validate transactions, and append new blocks, thereby earning rewards,” the Division explained.
Consequently, the Division determined that proof-of-work miners do not meet the “efforts of others” requirement outlined in the Howey test. Therefore, these miners are not obligated to register their activities with the Commission under the Securities Act.
The SEC’s statement is perceived as a significant regulatory advancement for crypto miners. Miners have long expressed their worries regarding regulatory ambiguity during the administration of former SEC Chair Gary Gensler. Nevertheless, with the new SEC leadership offering clearer standards, proof-of-work miners, especially those in Bitcoin, may find themselves operating with greater freedom.
This recent development could potentially trigger an upswing in stocks for Bitcoin mining companies, such as Marathon Digital (MARA), Riot Platforms (RIOT), and Bitfarms (BITF).
In related news, Senate Banking Committee Chairman Tim Scott announced that Paul Atkins, nominated by President Trump for SEC Chair, will appear before the committee next Thursday for his confirmation hearing.
Following the hearing, the Senate Banking Committee is expected to vote on Atkins’ nomination. If the nomination receives approval, it will be sent to the full Senate for a confirmation vote.