SEC Rules PoW Mining Does Not Violate Securities Laws
The U.S. Securities and Exchange Commission (SEC) has clarified that mining Proof-of-Work (PoW) cryptocurrencies – such as Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH) – is not subject to current securities laws.
This is a big win for miners and the cryptocurrency industry at large, as it removes the uncertainty of whether mining operations could face regulatory crackdowns.
With regulators tightening their grip on cryptocurrencies in recent years, many have worried that PoW mining could be caught in the crossfire. But the SEC’s latest statement suggests otherwise.
SEC Confirms PoW Mining Is Not a Security
On March 20, the SEC’s Division of Corporate Finance issued a statement referring to “crypto asset mining that is closely related to the programmatic operation of a public, permissionless network.” The agency confirmed that decentralized PoW networks should not be classified as securities.
This means that individual miners and mining pool participants do not need to register their transactions with the SEC under the Securities Act. The announcement is part of the SEC’s ongoing efforts to refine cryptocurrency regulations.
PoW mining does not satisfy the Howey test
The SEC also ruled that PoW mining does not qualify as an investment contract under the Howey Test. This means that mining rewards are not considered securities. The decision follows the SEC’s recent stance that memecoins are not securities and comes after the agency ended a five-year legal battle with Ripple.
Major cryptocurrencies are classified as commodities
Bitcoin (BTC) is the largest and most well-known PoW cryptocurrency, but other cryptocurrencies such as Dogecoin (DOGE), Litecoin (LTC), and Monero (XMR) also use the same mining model. US regulators, including the Commodity Futures Trading Commission (CFTC), classify Bitcoin as a commodity rather than a security. This same classification applies to Litecoin and Dogecoin.
These updates signal a shift toward clearer cryptocurrency regulations rather than an enforcement-heavy approach. However, market reaction to the SEC’s statement was limited, as attention focused on President Donald Trump’s speech at the Digital Asset Summit.
Under Trump's leadership, the digital asset market, including PoW-based cryptocurrencies, is expected to grow.