SEC Clarifies Crypto Mining Rules
The U.S. Securities and Exchange Commission (SEC) has issued new guidance on Proof-of-work (PoW) mining. This update clarifies how federal securities laws apply to crypto mining activities.
The SEC states that PoW mining does not qualify as a securities transaction. They call this process “Protocol Mining.” The tokens earned from mining are termed “Covered Crypto Assets.”
PoW networks are public and permissionless.Miners validate transactions and ensure network security through computational efforts.
The SEC distinguishes between self-mining and mining pools. Self-mining involves individuals contributing computational power independently. Mining pools combine resources from multiple miners to increase the chances of earning block rewards.
while pool operators coordinate resources and distribute earnings, their role is considered administrative rather than managerial. Therefore, participation in mining pools does not change the nature of protocol mining.
This guidance provides clarity for miners in the U.S. By confirming that PoW mining is not a securities transaction, the SEC removes uncertainty about registration and reporting requirements. This decision could boost confidence in the mining industry, especially as it faces scrutiny over energy consumption and environmental impact.
For more details, check the SEC’s official statement.
