SEC Clarifies PoW Mining Not Linked to Securities

The U.S. Securities and Exchange Commission (SEC) has clarified that mining using the Proof-of-Work consensus algorithm does not constitute an offer or sale of securities.

“Accordingly, in the agency’s view, mining participants do not need to register transactions with the Commission under the Securities Act, nor do they fall under any of the registration exemptions provided by the Securities Act in connection with this mining activity,” the regulator stated.

Since Gary Gensler’s departure as head of the SEC, the agency’s stance towards the crypto industry has become more amicable. The Commission clarified the status of meme coins and ceased regulatory actions against ConsenSys, Uniswap Labs, Gemini, Robinhood, Coinbase, and several other industry players.

In its conclusion, the SEC relied on the Howey Test.

“Solo mining is not conducted with a reasonable expectation of profits derived from the entrepreneurial or managerial efforts of others. Rather, the miner invests their own computational resources, which secure the network and allow them to earn rewards issued by the network according to its protocol,” the regulator’s representatives noted.

Mining pools are also not associated with the offer and sale of securities, the SEC emphasized.

Back in December 2024, Commissioner Hester Peirce identified three key areas the agency should address in regulating digital assets.