The US Securities and Exchange Commission (SEC) has issued a statement on the status of Proof-of-Work cryptocurrency mining activities. According to the guidance, these mining activities will not come under existing securities rules, sending waves of excitement across the cryptoverse.
SEC Says Proof-Of-Work Mining Are Not Subject To Securities Laws
The US SEC is galloping toward crystal-clear regulations for cryptocurrencies and the last is a guidance on the status of protocol mining activities. According to a statement released by the SEC, Proof-of-Work mining activities will not be subject to existing securities obligations.
The SEC’s Division of Corporation Finance released the guidance, clarifying that the exemption applies to only Proof-of-Work mining activities. A community reading of the statement notes that the exempted activities are limited to only public blockchain networks.
“Accordingly it is the Division’s view that participants in mining activities do not need to register their transactions with the Commission under the Securities Act or fall within one of the Securities Act’s exemptions from registration in connection with these Mining Activities,” read the SEC’s statement.
Per the guidance, individual miners or mining pool participants are not required to register their transactions with the SEC. The move follows an earlier declaration by the SEC that memecoins are not securities amid a changing stance by the regulator.
The Commission hinges its decision to exempt “Covered Crypto Assets” from securities obligations based on its exclusion in section 2(a)(1) of the Securities Act. Furthermore, the application of the Howey test indicates that the proceeds of protocol mining do not constitute investment contracts.
Industry Braces For Incoming Positive Regulations From The Commission
The SEC is steamrolling towards the first of several roundtables with industry stakeholders led by its Crypto Task Force. Ahead of the discussions, the US SEC is keen on creating on creating a regulatory framework for digital securities.
Furthermore, Coinbase has presented a blueprint to the SEC urging the regulator to launch guidance to distinguish securities from commodities. Coinbase CLO Paul Grewal opines that clear rules will lead to the emergence of a vibrant market for tokenized securities.
Despite the push toward clarity, the SEC faces a FOIA request over the cost of its enforcement actions. The SEC is extricating itself from the previous pattern of regulation by enforcement, opting for clear-cut rules for the sector.
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