Michaela
The U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance has shared its perspective on crypto mining activities within proof-of-work (Pow) blockchain networks, aiming to clarify how federal securities laws apply to crypto assets.
In a statement issued on March 20, the SEC addressed the role of crypto asset mining within public, permissionless networks. The statement focused on assets that are fundamental to the network’s operation, either through participation in its consensus mechanism or by contributing to its security and functionality.
Additionally, the SEC clarified that decentralized PoW networks do not fall under the classification of securities. While the statement did not reference any specific blockchain, it outlined the SEC’s stance on PoW activities within permissionless networks that rely on mining for consensus. The guidance applies to both individual miners and mining pools operating within these networks.
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“It is the Division’s view that “Mining Activities” (defined in this statement) in connection with Protocol Mining, under the circumstances described in this statement, do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the “Securities Act”) and Section 3(a)(10) of the Securities Exchange Act of 1934 (the “Exchange Act”),” it read.
Accordingly, it is the Division’s view that participants in mining activities do not need to register transactions with the Commission under the Securities Act or fall within one of the Securities Act’s exemptions from registration in connection with these mining activities.
Furthermore, the SEC’s Division of Corporation Finance stated that individuals and entities engaged in mining activities are not required to register their transactions under the Securities Act. The division also clarified that these activities do not need to qualify for an exemption from registration.
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The SEC’s guidance marks a significant clarification in the ongoing debate over cryptocurrency regulations. However, the broader regulatory landscape for crypto assets remains complex, with the SEC continuing to assess various blockchain-based financial activities on a case-by-case basis.
As the crypto industry evolves, the SEC’s stance on mining could influence regulatory approaches in other jurisdictions. Industry participants are expected to closely monitor any further developments or additional guidance that may emerge in the future.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
