Bitcoin Mining Activities Don't Breach Federal Securities Laws: SEC Clarifies Participants Need Not Register Transactions
The Securities and Exchange Commission clarified its position on cryptocurrency mining activities Thursday, asserting that they do not fall under federal securities laws.
What Happened: The SEC’s Division of Corporation Finance stated that proof-of-work mining activities, which involve using computational resources to validate blockchain transactions and getting rewarded, do not involve the offer and sale of securities. As a result, participants in these activities are not obligated to register transactions with the Commission under the Securities Act
The SEC’s perspective applied to two categories: self (or solo) mining on a PoW network, and mining pools, which combine computational resources to increase their chances of validating transactions.
Notably, Bitcoin (CRYPTO: BTC) is the world's largest PoW network, followed by Dogecoin (CRYPTO: DOGE) and Litecoin (CRYPTO: LTC) respectively.
See Also: Cathie Wood Believes Most Memecoins Will Face ‘Fearsome Declines,’ But They Could End Up Becoming Collector’s Items
Why It Matters: This statement from the SEC comes on the heels of a series of cryptocurrency-friendly measures introduced by the regulator.
Last month, it clarified that meme coins do not fall under the purview of federal securities laws, although fraudulent activities involving them could still face legal consequences.
Earlier this week, Ripple CEO Brad Garlinghouse said that the SEC dropped its appeal in the XRP (CRYPTO: XRP) lawsuit, marking the end of a four-year legal battle. This was seen as a significant development for the crypto industry, as reported by Benzinga.
The SEC has granted similar relief to cryptocurrency exchanges Coinbase, Robinhood Markets’ cryptocurrency operations, Gemini, and decentralized cryptocurrency exchange Uniswap, aligning with President Donald Trump’s promise of fostering growth in the sector.
Price Action: Shares of Coinshares Valkyrie Bitcoin Miners ETF (NASDAQ:WGMI), which provides exposure to public Bitcoin mining companies, closed 1.45% lower at $14.98 during Thursday’s regular trading session.
Photo by Gaston Cerliani on Shutterstock
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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Posted-In: Bitcoin crypto mining Mining activities Proof-Of-Work SECCryptocurrency News Markets
