Friday, September 27, 2024-In a groundbreaking legal decision, the U.S. Securities and Exchange Commission (SEC) has successfully classified certain crypto mining equipment as securities, tightening its regulatory grip on the industry. A federal court ruling on Thursday affirmed the SEC’s interpretation in a lawsuit against Green United LLC, stating that mining devices and hosting agreements meet the criteria for securities.
The decision redefines the legal status of crypto mining. The SEC they argued that the mining equipment, sold as “Green Boxes” with promised returns, constituted investment contracts under the Howey test.
Judge Ann Marie McIff Allen of the Utah District Court supported this view, rejecting Green United’s motion to dismiss the case.
She found the SEC had “sufficiently alleged a security in the form of Green Boxes coupled with a Hosting Agreement.”
Analysts believe the ruling could have significant implications for the mining sector.
Companies offering mining services may now be required to register with the SEC, facing stricter regulations and disclosure mandates. The decision signals a potential wave of lawsuits and restructuring in the crypto-mining industry.
