The SEC has clarified for the first time that certain Bitcoin mining models may be considered securities.
Specifically, the Bitcoin mining services through a third party.
🔸 The U.S. SEC has sued the founder of the Bitcoin mining company VBit, accusing them of offering unregistered securities through a Bitcoin hosting service model.
🔸 In addition to selling mining machines, VBit provides hosting services, where customers purchase "benefits" in the company's mining operations and receive periodic Bitcoin, while all mining machines are operated and controlled by VBit.
🔸 The SEC believes this model leads investors to expect profits based on the efforts of a third party (VBit), meeting the criteria for securities under U.S. law.
🔸 The agency also accused the founder of deceiving investors, as the actual number of mining machines was insufficient compared to the service contracts sold, causing many customers to suffer significant losses.
🔸 The SEC further accused him of misappropriating $48.5 million of customer funds, using it to buy crypto, gamble, and spend lavishly on his family.
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