Proof of mining is not safe under certain circumstances
- SEC clarified that the prisoners mining on networks without permission are not considered a “offer and sale of securities” under the 1933 law if specific conditions are met.
- The organizer stated that mining is an administrative activity – the network securing, verifying the validity of transactions and gaining rewards based on the arithmetic contribution.
- The ruling applies to individual miners, mining complexes and operators, and is in line with the broader step to drop lawsuits against major encryption companies.
In a break that affects the need for workers, the US Securities and Stock Exchange Committee (SEC) announced on Thursday that mining of proof of work (POW) does not violate securities laws, which removes the need to register these activities under the Securities Law of 1933.
In a statement dated March 20, the SEC Foundation’s Finance Department highlighted that prisoners mining, referred to as “protocol mining”, covering the verification of the validity of transactions and network security for observations that depend on mathematical energy instead of the central broker.
Miners are receiving new encryption bonuses called “covered encryption assets”, to verify transactions and network secure.
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Mining is just an administrative activity
SEC’s latest statement It is clear Mining is just an “administrative practice”:
By adding its arithmetic resources to the network, the miner only participates in an administrative or ministerial activity to secure the network, verify the health of transactions, add new blocks, and receive rewards.
The United States again
The organizer also explained that the participants in mining gatherings – where miners collect their calculations to increase their opportunities to discover new blocks – are also not considered participants in securities transactions.
Likewise, billiard operators, who coordinate efforts and distribute profits, also do “administrative” activities, noting that the rewards are still dependent on the contribution of all account mines, and not on the administrative experience of any party or entrepreneurship efforts.
SEC has not cited any specific metal coins, but it makes sense to assume that this applies to all cryptocurrencies that use Pow algorithm.
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The SEC Declaration comes at a time when the organizer decided to end his “wasteful campaign, with political motives”, as it was called, by dropping many lawsuits against some of the most important encryption companies/ecosystem, including Cornerand Testimony LaboratoryAnd UNISWAP.
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