The US Securities and Exchange Commission (SEC) has clarified its stance on crypto mining under proof-of-work (PoW) protocols, stating that mining activities do not involve offering and selling securities. This applies to assets such as Bitcoin (BTC) and Litecoin (LTC).
In a March 20 statement, the SEC’s Division of Corporation Finance stated that participants engaged in PoW mining do not need to register transactions with the Commission under the Securities Act of 1933 or qualify for an exemption from registration.
Understanding on mining
The SEC’s statement focuses on “Protocol Mining,” which encompasses activities related to validating transactions and maintaining network security on PoW-based blockchains.
These blockchains operate without a central intermediary, relying on miners contributing computational resources to verify transactions and secure the network. In return, miners receive rewards in the form of newly minted crypto, which the statement refers to as “Cover
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