Law & Policy

🚨 SEC Clarifies Stance on PoW Mining 

The SEC’s CorpFin division stated that proof-of-work mining (self-mining or pool participation) does not qualify as securities transactions under the Howey Test. No registration required for these activities. 🧵

general counsel @ 1kx // co-founder @ thing3 // summoner @ hydra ventures

Self-Mining ≠ Security

Solo miners’ profits stem from their own hardware/energy investments, not passive reliance on a third party’s work. The Howey “efforts of others” test fails here. Rewards = payment for services, not securities.

Mining Pools Also Exempt

Pool operators handle logistics (e.g., payout distribution), but miners still rely on their own computational contributions. SEC says pool ops are “administrative,” not entrepreneurial. Profits tied to pooled resources, not passive income.

Implications

Clearer regulatory path for BTC miners and similar PoW networks. SEC’s focus remains on assets with “passive yield” or profit-sharing features. 

Still: Verify specific setups – unusual structures could face scrutiny.

Full statement:

Implications

Clearer regulatory path for BTC miners and similar PoW networks. SEC’s focus remains on assets with “passive yield” or profit-sharing features. 

Still: Verify specific setups – unusual structures could face scrutiny.

Full statement: https://www.sec.gov/newsroom/speeches-statements/statement-certain-proof-work-mining-activities-032025

Why?

Miners contribute computational power to validate transactions + secure networks. Rewards are earned via protocol rules, not from others’ managerial efforts. SEC views this as administrative work, not investment contracts.

Regulatory clarity! Post loper bright, there’s perhaps greater uncertainty as to what this would mean in the courts, but we love to see this type of guidance.

Good news for miners here for sure.  

Funny that meme coins got the news release first from the SEC..