The SEC filed a lawsuit against VBit Technologies, stating that some Bitcoin mining hosting contracts could be considered securities. The complaint alleges that 6,400 investors contributed $95.6 million through agreements promising passive profits, while the company operated fewer machines than contracted and part of the funds was allegedly used for personal purposes.
The agency argues that the agreements qualify as “investment contracts” under the Howey Test, since investors relied entirely on VBit’s management and had no control over the hardware or mining. The lawsuit does not affect Bitcoin or Proof-of-Work mining in general, but targets the structure of these services marketed as passive income.
The case establishes a regulatory boundary: direct mining and traditional pools remain outside SEC oversight, while passive hosting contracts promising returns managed by third parties could be treated as securities.
Source: https://www.sec.gov/files/litigation/complaints/2025/comp26448.pdf
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