SEC Declares Proof-of-Work Cryptoassets Not Securities, Paving Way for Altcoin ETFs

The Securities and Exchange Commission (SEC) has declared that proof-of-work cryptoassets are not bound by securities regulations. This clarification, along with the commission's recent actions, has led analysts to predict that the SEC will approve multiple altcoin ETFs by the end of the second quarter of 2025.

In a recent press release, the SEC stated that mining activities do not involve the offer and sale of securities, and participants in these activities do not need to register transactions with the commission. This regulatory clarity could significantly impact the approval odds for ETFs related to proof-of-work cryptoassets, such as Litecoin.

The SEC's decision to classify proof-of-work cryptoassets as commodities, similar to Bitcoin, could pave the way for more asset managers to offer ETFs for other proof-of-work coins like Monero or Kaspa. This trend extends beyond proof-of-work cryptoassets, as the SEC has been systematically declaring various assets as commodities. For instance, in February, the commission declared that meme coins are not securities, potentially clearing the regulatory roadblock for Dogecoin ETFs.

The SEC's actions, including the approval of futures trading on assets like Solana and XRP by the Commodity Futures Trading Commission (CFTC), and the dismissal of a landmark lawsuit against Ripple, indicate a systematic removal of regulatory hurdles for altcoin funds entering institutional markets.

The upcoming confirmation hearings for Paul Atkins, Trump’s pick to be the next SEC Chair, could further influence the approval of altcoin ETFs. With Mark Uyeda and Hester Peirce already clarifying the securities and commodities debate, Atkins is likely to have an easy decision to approve a range of different altcoin ETFs.

However, not all commissioners are in agreement with this pro-crypto agenda. Caroline Crenshaw, an anti-crypto SEC Commissioner, has publicly dissented, criticizing the SEC's recent decisions as full of loopholes. She asserted that the SEC's argument does not guarantee that proof-of-work tokens are free from securities laws. Despite her objections, the SEC's pro-crypto agenda seems poised to continue, with the potential approval of multiple altcoin ETFs by the end of Q2 2025.