The SEC reassured miners that Proof-of-Work mining does not fall under federal securities laws.
SEC Explanation
The SEC's Division of Corporate Finance stated that mining operators are not required to register their transactions with the regulator.
Reason for Exemption
The SEC explained that PoW mining does not meet the criteria for a securities transaction under the Howey Test. This legal framework evaluates whether a transaction constitutes an investment contract by determining if there is a reasonable expectation of profit based on the efforts of others. PoW mining lacks this component and is thus exempt from securities regulation.
PoW Cryptocurrencies
The largest cryptocurrencies using the Proof of Work mechanism include: Bitcoin (BTC), Dogecoin (DOGE), Litecoin (LTC), Bitcoin Cash (BCH), Monero (XMR), Ethereum Classic (ETC), Kaspa (KAS), Bitcoin SV (BSV), Zcash (ZEC), Beldex (BDX), Conflux (CFX), eCash (XEC), Verus (VRSC), Dash (DASH).
The SEC's announcement alleviates concerns that its enforcement division could target PoW crypto miners. The agency has previously designated Bitcoin as a commodity, avoiding securities regulation, but warns of fraudulent schemes within the sector.
