US SEC Says Proof-of-Work Mining Not a Securities Activity

The United States of America Securities and Exchange Commission (SEC) recently announced a new regulation on Proof-of-Work (PoW) mining.

The agency clarified that it does not classify Bitcoin mining as a securities activity and issued new instructions on how to view certain PoW mining activities under existing securities laws.

Notably, the statement comes amid growing discussions on cryptocurrency regulations, including the status of memecoins and decentralized finance (DeFi).

SEC on PoW and Bitcoin Mining

In a statement on the agency’s website, the SEC’s Division of Corporation Finance mentioned that federal securities laws do not bind PoW mining activities.

The agency stressed that participants in PoW mining do not need to register transactions for regulatory oversight or seek exemptions from securities regulations.

Furthermore, the division clarified that mining involves using computational power to validate blockchain transactions and secure the network.

Miners do not invest in a common enterprise or rely on others for profit. This exempts the industry from the Securities Acts of 1933 and 1934.

Many experts suggest that this statement reassures PoW miners that their operations can continue without additional regulatory oversight.

It also strengthens the legal standing of Bitcoin mining, as Bitcoin operates on a PoW consensus mechanism.

Mining pools and operators continue to grow, with miners contributing computational resources to earn block rewards.

Operators typically oversee these resources, maintain security measures, and distribute rewards based on each miner’s contribution.

The SEC’s stance ensures that these activities will not be subject to securities laws, allowing miners flexibility and reducing uncertainty in the industry.

US SEC’s Stance on Meme Coins and DeFi

In a related development, the commission has addressed the regulatory status of memecoins, stating that they do not fall under securities laws.

In February, the commission cited in a news release that memecoins were primarily used for entertainment and speculative trading rather than investment in a business.

Unlike traditional securities, these digital assets do not offer ownership rights, dividends, or yield.

While this provides legal clarity, the SEC warned that memecoin holders do not receive the same protections as traditional investors.

This means that fraudulent projects and price manipulation remain concerns within the space.

On decentralized finance, the SEC has yet to provide comprehensive regulations.

However, the agency is actively assessing how DeFi platforms operate and how they should be classified under securities laws.

Reports show that market participants are expecting future regulatory updates that will mirror the SEC’s present outlook regarding cryptocurrency regulations in the US.

Bitcoin and Major Altcoins Outlook

According to recent market data, the Security agency announcements had little impact on major cryptocurrencies.

For example, memecoins like Shiba Inu gained 1%, BONK rose 5%, and PEPE saw slight gains, while others like Dogecoin and TRUMP dropped by 2%.

Meanwhile, Bitcoin, Ethereum, and XRP have all seen over 2% price corrections in the last 24 hours. This shows the continued market uncertainty despite the regulatory update.

As of this publication, the largest token by market capitalization and utility, Bitcoin, has seen its price currently trading at $84,217.96.

Still, market analysts speculate that US President Donald Trump’s recent speech at the Digital Asset Summit could create a long-term tailwind for the market.