SEC says proof-of-work mining does not constitute securities dealing

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The securities regulator has clarified its stance connected alleged “Covered Crypto Assets” and “Protocol Mining” involving public, permissionless PoW networks.

SEC says proof-of-work mining does not represent securities dealing

The US Securities and Exchange Commission’s Division of Corporation Finance has clarified its views connected proof-of-work mining, arguing that specified activities bash not represent “the connection and merchantability of securities” arsenic outlined successful the Securities Act of 1933, truthful agelong arsenic they conscionable definite criteria.

In a March 20 statement, the SEC part addressed the “mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network” and determined that decentralized PoW networks should not beryllium treated arsenic securities.

Although the SEC’s connection did not sanction immoderate circumstantial blockchain, its views connected definite PoW activities use to permissionless networks wherever mining is utilized to enactment successful the statement mechanism. The connection applies to solo miners and mining pools participating successful specified networks.

Although Bitcoin (BTC) is by acold the largest and astir important PoW chain, determination are respective others, including Dogecoin (DOGE), Litecoin (LTC) and Monero (XMR). US regulators person agelong considered Bitcoin to beryllium a commodity and not a information — a presumption that besides extends to Litecoin and Dogecoin, according to the Commodity Futures Trading Commission.

A pro-crypto argumentation tailwind

Digital plus markets, including PoW chains, are acceptable to flourish nether US President Donald Trump, who has vowed to marque America the world’s blockchain and crypto capital.

In summation to appointing a pro-crypto replacement to Gary Gensler astatine the SEC, the president has established the Council of Advisers connected Digital Assets to beforehand common-sense regulations for the industry.

On March 19, the council’s enforcement director, Bo Hines, revealed that a broad stablecoin measure could land connected the president’s desk successful a substance of months.

The aforesaid day, the Blockchain Association, an manufacture advocacy group, said a cryptocurrency marketplace operation bill is expected by the summer.

“I deliberation we’re adjacent to being capable to get those done for August […] They’re doing a batch of enactment connected that down the scenes close now,” said Kristin Smith, the Blockchain Association’s CEO.