SEC Confirms Proof-of-Work Crypto Mining Does Not Fall Under Securities Laws

The United States Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued a statement on Thursday clarifying its stance on proof-of-work (PoW) crypto mining. The statement revealed that both solo mining and mining pools do not fall under the scope of U.S. securities laws because they do not require the efforts of a central entity or corporate figure to generate profits.

The SEC’s Division of Corporation Finance has released a statement clarifying its stance on proof-of-work mining. The regulator said mining “protected crypto assets” — such as Bitcoin (BTC) — on public, permissionless blockchains does not constitute a securities offering.

In the statement, the department mentioned two main types of miners, solo miners and mining pools. These miners earn rewards by using computing power to solve complex cryptographic puzzles. The department described their activities as a form of administrative or transactional protocol mining.

“By adding their computing resources to the mining pool, miners are merely performing an administrative or clerical activity to ensure network security, verify transactions and add new blocks, thereby earning rewards,” the department noted.

Therefore, the department concluded that proof-of-work miners do not meet the “efforts of others” requirement of the Howe test. As a result, miners are not required to register their transactions with the Commission under securities laws.

The SEC’s clarification statement is seen as a long-awaited regulatory breakthrough for crypto miners. Miners frequently expressed concerns about regulatory uncertainty during the tenure of former SEC Chairman Gary Gensler. However, with new SEC management providing clearer guidance, proof-of-work miners — especially bitcoin miners — may be able to operate more freely.

This latest development could spark a rally in shares of Bitcoin mining companies, including Marathon Digital (MARA), Riot Platforms (RIOT), and Bitfarms (BITF).

In other news, Senate Banking Committee Chairman Tim Scott announced that President Trump's nominee for SEC Chairman Paul Atkins will face a nomination hearing before the committee next Thursday.

After the hearing, the Senate Banking Committee is likely to vote on Atkins' nomination. If approved, it would go to the full Senate for a confirmation vote.