The U.S. Securities and Exchange Commission (SEC) has issued new guidance clarifying that proof-of-work (PoW) mining does not constitute a securities transaction.
The statement, released by the SEC’s Division of Corporate Finance, introduces the term “Covered Crypto Assets” for tokens earned through PoW mining, now referred to as “Protocol Mining.”
The SEC emphasized that mining activities are essential to blockchain networks and do not rely on the managerial efforts of a third party—key criteria under the Howey Test for defining securities.
The guidance distinguishes between solo mining and mining pools, reaffirming that pooling resources does not transform mining into an investment contract. While pool operators facilitate infrastructure and earnings distribution, their role remains administrative rather than managerial.
This clarification removes uncertainty for U.S.-based miners, ensuring they are not subject to securities regulations. It could strengthen confidence in the mining sector, which continues to face regulatory scrutiny over energy consumption and environmental concerns.
Image Credit: Pixabay
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