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

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.

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.

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

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.