The SEC has filed a lawsuit claiming that third-party Bitcoin mining hosting services could be considered securities offerings. VBit and its founder, Danh Vo, are accused of fraud and misappropriating $48 million by selling more hosting agreements than mining rigs. The SEC alleges that VBit’s hosting agreements are securities under the Howey test, as investors relied on VBit’s efforts for profit.

Industry executive Mitchell Askew argues that pooling hashrate is not common practice for hosted Bitcoin mining services. Legitimate hosted mining involves purchasing a computer and electricity without pooling capital or relying on a promoter for returns. Askew believes the SEC’s view should not impact the hosted mining industry, as it does not resemble an investment contract.

The SEC’s classification of hosted Bitcoin mining as a security is a significant move under the Trump administration, which has shown more support for the industry. While some investigations started under the Biden administration have been dropped, ongoing fraud-related lawsuits continue. The SEC has not commented on the lawsuit.

Read more at Cointelegraph: SEC Says Hosted Bitcoin Miners Could Trigger Securities Laws