SEC Releases Positive News! PoW Mining Not Considered a Securities Offering!

TradingKey - The U.S. SEC has significantly relaxed mining regulations, stating that PoW mining does not constitute a securities activity and does not require registration under securities laws.  

On Thursday, the U.S. Securities and Exchange Commission (SEC) issued a statement declaring that cryptocurrency mining based on the Proof of Work (PoW) mechanism is an "administrative or ministerial activity" and does not constitute a securities offering. As a result, mining participants do not need to register with the SEC under the Securities Act.

The statement noted, "Whether miners operate independently or through mining pools, the rewards they receive are direct compensation for their computational contributions, not profits derived from the management or efforts of others. Therefore, they do not meet the definition of an 'investment contract.'"

The SEC's relaxed regulatory requirements not only allow existing miners and mining pool operators to continue their operations but also make it easier for mining resources from other countries or regions to migrate to the U.S., aligning with President Trump's strategic goal of making the U.S. the global cryptocurrency hub.

Following the SEC's announcement, PoW-based cryptocurrencies like Bitcoin (BTC) did not rise but instead fell, primarily due to two reasons: first, the positive news mainly stimulates mining demand; second, Trump's speech at the New York Digital Asset Summit fell short of expectations, dampening investor confidence.

Top 10 PoW Cryptocurrencies by Market Cap, Source: CoinGecko.