SEC Says Proof-of-Work Mining Activities Not Considered Securities
The US Securities and Exchange Commission (SEC) announced that proof-of-work (PoW) mining does not infringe securities laws, thus eliminating the need for registration under the Securities Act of 1933.
In a statement from March 20, the SEC’s Division of Corporation Finance explained that PoW mining, known as “Protocol Mining,” involves transaction validation and network security through computational power, not a central intermediary.
Miners are rewarded with newly minted crypto assets for their role in verifying transactions and securing the network.
The SEC clarified that mining is an “administrative practice,” stating that by contributing computational resources, miners are simply performing administrative tasks to secure the network, validate transactions, and receive rewards.
