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SEC: Proof-of-Work Mining Not Subject to Securities Laws

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By BlockFlowMar 21, 2025

Part of an Effort to Provide Greater Clarity on the Application of the Federal Securities Laws to Crypto Assets.

The U.S. Securities and Exchange Commission's Division of Corporation Finance issued a statement on March 20 declaring that proof-of-work (PoW) mining activities do not constitute securities offerings under federal securities laws.

According to the SEC, neither solo mining nor mining pools meet the crucial "Howey Test" criterion requiring "reasonable expectation of profits derived from others' entrepreneurial or managerial efforts."

"Rewards are payments to the miner in exchange for services it provides to the network rather than profits derived from the entrepreneurial or managerial efforts of others," the statement explains.

The SEC described Thursday's announcement as "part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets" — a priority that industry participants have advocated for over many years.

This regulatory shift comes under the leadership of Acting Chair Mark Uyeda, who established a Crypto Task Force led by Commissioner Hester Peirce. The agency has been rapidly changing its approach to cryptocurrency regulation, abandoning lawsuits and investigations initiated under former Chair Gary Gensler and repealing the controversial Staff Accounting Bulletin 121.

The determination applies specifically to mining of crypto assets linked to public, permissionless networks, while other crypto transactions still require case-by-case analysis under securities regulations.

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