The U.S. Securities and Exchange Commission has officially clarified that proof-of-work (PoW) mining, including both individual and pooled mining operations, does not fall under federal securities regulations.
The announcement, released in a staff statement on March 20, 2025, provides long-awaited clarity for Bitcoin miners and the broader crypto industry.
Crypto Mining Is Just an Administrative Activity
The statement, issued by the SEC’s Division of Corporation Finance, asserts that crypto mining activities do not meet the criteria outlined in the Howey Test, the legal standard used to determine whether a transaction qualifies as an investment contract.
Specifically, the agency stated that mining does not involve
a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others
Meaning it does not qualify as a securities transaction.
This decision is a significant shift in the SEC’s approach to cryptocurrency regulation, particularly under the leadership of Acting Chair Mark Uyeda, who has prioritized regulatory transparency. The agency’s stance eliminates concerns that legitimate crypto miners could face enforcement actions similar to those targeting fraudulent mining-related schemes in the past.
Major Shift Under the New SEC Leadership
Under the previous administration led by former Chair Gary Gensler, the SEC’s regulatory actions created uncertainty within the crypto sector. While Gensler reluctantly acknowledged Bitcoin as a commodity rather than a security, his agency’s lawsuit against Green United—a cloud mining company accused of running a Ponzi scheme—raised concerns that the agency might eventually target legitimate crypto mining operations.
However, under Uyeda’s leadership, the agency has adopted a markedly different approach. Crypto-friendly Commissioner Hester Peirce has spearheaded a newly established Crypto Task Force aimed at reworking outdated regulatory policies. In addition to clarifying crypto mining rules, the SEC recently repealed the controversial Staff Accounting Bulletin 121, which had placed restrictive accounting requirements on crypto custody services.
The decision also aligns with previous rulings from the Commodity Futures Trading Commission (CFTC), which has classified Bitcoin, Litecoin, and Dogecoin as commodities rather than securities.
