Key Takeaways
- The SEC confirms Bitcoin mining does not involve securities.
- Solo miners and mining pools are exempt from registration rules.
- Mining rewards are seen as compensation, not investment profits.
The U.S. Securities and Exchange Commission (SEC) has clarified its stance on proof-of-work (PoW) mining, stating that mining activities do not constitute the offer and sale of securities under the Securities Act of 1933 and the Exchange Act of 1934.
Solo mining & mining pools
The SEC’s statement covers solo mining and mining pools, affirming that participants are not subject to securities registration requirements.
The agency determined that Bitcoin miners earn rewards through their computational contributions rather than through the efforts of third parties.
Rewards as compensation
The statement reads:
A miner’s expectation to receive Rewards is not derived from any third party’s managerial or entrepreneurial efforts.
Instead, rewards are viewed as compensation for services rendered to the network.
Mining pools and the Howey Test
The SEC also found that mining pools do not meet the criteria for an investment contract under the Howey Test.
While mining pools combine resources, individual miners still perform the computational work, meaning profits are not dependent on the managerial efforts of others.
This statement reinforces the legal status of Bitcoin mining in the U.S. and provides clarity for miners and pool operators regarding regulatory compliance.
