SEC confirms Bitcoin is not a Security
The U.S. Securities and Exchange Commission’s Corporation Finance Division issued a statement outlining its stance on proof-of-work (PoW) cryptocurrency mining. According to the statement, single mining and mining pools are exempt from US securities laws since they don’t need the help of a central organization or enterprising individual to turn a profit.
Bitcoin miners view the SEC’s clarification as a long-awaited regulatory victory. BTC miners have expressed concerns about regulatory uncertainty under former SEC Chair Gary Gensler’s leadership.
The Division of Corporation Finance at the SEC released a statement outlining its position on proof-of-work mining. Mining “Covered Crypto Assets” on open, permissionless blockchains, like Bitcoin, does not amount to securities offerings. Bitcoin miners could operate more freely under the new SEC administration’s more transparent rules.
The Division identified two main categories of miners in its statement: mining pools and solo miners. These miners use their processing power to solve challenging cryptographic puzzles to receive rewards.
According to the financial watchdog, their activity amounted to protocol mining on an administrative or ministerial level.
The Division pointed out that “the miner is merely engaging in an administrative or ministerial activity to secure the network, validate transactions, add new blocks, and receive rewards by adding its computational resources to a mining pool.”.
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