01 The seven lenses
Every row in the matrix was checked against the same seven questions. A feature can fail one lens and pass the rest; the "Regulatory concern" column names the lens that matters most for that row.
- Custody
- Does the feature cause the operator to hold, control, or be able to move value that belongs to a miner? FinCEN's hosted-wallet criteria — who owns the value, where it is stored, whether the owner interacts with the network directly, and whether the intermediary has independent control — are the test.
- Money transmission
- Does the feature involve accepting value from one person and transmitting it to another, or to another location? Federally, the question is whether a transfer is integral to the mining service (FIN-2019-G001 §5.4). In Pennsylvania, Act 7 of 2025 asks whether the operator transmits virtual currency for a fee with or on behalf of an individual, and has no integral-services carve-out.
- Exchange or broker
- Does the feature involve converting SPMTC to or from anything else, matching buyers and sellers, or acting for a miner in a trade?
- Securities and investment marketing
- Does the feature, or the copy around it, present SPMTC or mining as an investment with an expected return produced by the operator's efforts? The SEC staff statement of 20 March 2025 turns on pool operators being administrative or ministerial.
- OFAC
- Could the feature deliver value to, or take part in a transaction with, a sanctioned person or jurisdiction — and does the operator have the information needed to prevent that?
- Consumer protection
- Could the feature mislead a miner about what they will receive, when, or what the operator can do for them?
- Privacy
- Does the feature collect or retain more about a miner than mining requires?
02 The matrix
Values in the last column: No the feature is consistent with the posture as designed; Omit the feature is not built; STOP — legal review the feature is retained or proposed but must be reviewed by counsel before implementation.
| Feature | Purpose | Regulatory concern | Risk-reduction design | Legal review needed? |
|---|---|---|---|---|
| Stratum mining endpoint | Receive SHA-256 work from miner hardware | Money transmission (is the service mining?); OFAC (who connects) | The endpoint accepts shares only. No value enters through it. IP-country gate applied at connection. Endpoint is the substantive service. | No |
| Address-as-identity login | Identify a miner by payout address plus worker name; no account | Custody (no hosted account); privacy | No password, no profile, no key generation. The address is validated by bech32 checksum and never stored with anything that could unlock it. | No |
| Pending-mining-reward ledger | Record each miner's share of mature block rewards until the next payout run | Custody; money transmission (does a held allocation become an account?) | Single column reward_allocations.net; exists only to be paid; daily run; 1 SPMTC threshold; 30-day inactive sweep; labelled "pending mining reward" with the standing explanation; never miner-adjustable. |
STOP — legal review |
| PPLNS reward calculation | Apportion a found block's reward to the shares that contributed to it | Securities marketing (is the operator's effort producing the return?); consumer protection | Rewards depend on blocks actually found and on the miner's own work. The operator advances nothing. Window rule published; per-block calculation exportable. | No |
| PPS (pay-per-share) — rejected alternative | Pay a fixed amount per share regardless of blocks found | Money transmission; securities marketing (operator-funded return); custody | Not built. Under PPS the operator pays from its own reserve in advance of block rewards, which is a credit relationship and a return the operator produces. PPLNS pays only from actual rewards. | Omit |
| Pool fee (1%, proposed) | Compensate the operator for running mining infrastructure | Money transmission in Pennsylvania ("for a fee or other consideration"); consumer protection | Taken from the block reward before apportionment, never on the payout transaction. Described only as compensation for infrastructure. Changes announced 30 days ahead. | STOP — legal review |
| Automatic daily payout run | Distribute mature pending rewards to miner addresses | Money transmission (is the distribution integral?); custody (hold time) | Mechanical, scheduled, not requested by the miner. No "withdraw" action exists. The run is the only path by which allocated value leaves the ledger. | STOP — legal review |
| 1 SPMTC payout threshold | Avoid paying dust amounts with disproportionate network fees | Custody (accumulation) | Fixed, low, and not miner-adjustable — a miner-set threshold would look like a savings preference. Justified solely by operational practicality and stated as such. | STOP — legal review |
| Inactive-miner sweep (30 days) | Pay out anything above the dust limit for an address that stopped submitting shares | Custody (avoid indefinite holding); abandoned-property law | Ensures the operator does not retain allocations for miners who left. Anything below dust is unpayable by the network's own rules and is disclosed. | STOP — legal review |
| Batched payout transaction | Pay all eligible addresses in one on-chain transaction per run | Consumer protection (fee allocation); money transmission (form of transfer) | Network fee deducted pro rata and shown per miner. Single txid published on the dashboard and stats page so any miner can verify their output on their own node. | No |
| Orphan reversal | Remove allocations for a block that was orphaned before maturity | Consumer protection (pending figure decreases) | Only unmatured allocations can be reversed. Reason shown on the dashboard. Documented in the payout policy and the rewards page. | No |
| Payout-address redirect — omitted | Would let a miner (or support) send an existing allocation to a different address | Custody; money transmission (operator moving value on instruction); consumer protection (account takeover) | Not built. Rewards go only to the address the shares were mined under. To use a new address, mine with it. Removes the only path by which the operator could move value on someone's say-so. | Omit |
| Notification email via signed message | Let a miner receive block/payout notices | Privacy; consumer protection (phishing surface) | Optional. Control proven by signing a message with the payout address — no password, no key ever requested. Email confirmation link, 24-hour delay on changes, audit log, permanent private-key warning on the form. | No |
| Public dashboard by address | Show hashrate, shares, pending reward, payouts for any address | Privacy (address activity is public); consumer protection (labels) | Read-only, no login. Shows only what is already derivable from the chain plus share counts. Uses mining terminology; no "balance". Optional bookmark token only hides the address from the URL. | No |
| CSV share export | Let a miner verify the reward calculation independently | Privacy | Export is per address, contains only that address's shares and allocations. Supports the transparency claim that payout maths can be checked rather than trusted. | No |
| IP-country gate | Prevent connections from comprehensively sanctioned jurisdictions | OFAC; privacy (geolocation) | Applied to web and Stratum. Country-level only; no precise geolocation stored. Jurisdiction list maintained against OFAC's current programmes (Cuba, Iran, North Korea, Crimea/DNR/LNR at time of writing). Decisions logged. | STOP — legal review |
| SDN address screening | Check payout addresses against OFAC-listed digital-currency addresses | OFAC | Runs at first sight of an address and before each payout run. Uses the information the service already has. Matches logged with reason. | STOP — legal review |
| Payout withholding on match | Withhold a payout where legally required | Custody (the one case where the operator retains value); OFAC (blocking and reporting mechanics) | Only triggered by a screening match or lawful order; never discretionary; logged; counsel notified. Retained because the alternative — paying a listed address — is worse. | STOP — legal review |
| Support email | Help with connection, workers, shares, payouts, node builds | Consumer protection (advice); securities marketing (price talk) | Scope limited to mining and network operation. Support cannot recover keys, redirect payouts, convert SPMTC, or discuss price. Scripted refusals for out-of-scope requests. | No |
| Google Fonts on the website | Typography | Privacy (third-party request discloses visitor IP to Google) | Disclosed in the privacy policy. Self-hosting the two font families is the lower-risk option and is recommended before launch. | No |
| Network statistics API | Publish block height, hashrate, difficulty, blocks, pool stats as JSON | Consumer protection (accuracy) | Read-only, no authentication, no per-miner data beyond what the dashboard shows. Every figure verifiable from a miner's own node. | No |
| Solo-mining documentation | Explain how to mine against your own node without using the pool | None — it reduces reliance on the operator | Published on the node page. Demonstrates the network is not the operator's. | No |
| 8% pre-launch acquisition | The team mines 8% of supply at the ordinary reward before public launch | Securities marketing (disclosure); consumer protection | Mined, not minted; block range published; pinned by checkpoints in the first public release. Disclosed on the economic policy page and the homepage. FIN-2014-R001 addresses a person mining for its own account. | STOP — legal review |
| Block explorer | Browse blocks, transactions, and addresses | Privacy (address linkage); none otherwise | Shows only public chain data. Not linked to dashboard identities beyond what is already public. | No |
| "Convert to BTC" or any conversion — omitted | Would let a miner receive rewards in another asset | Exchange or broker; money transmission; custody | Not built. Would make the operator an exchanger. The service only ever handles the SPMTC it mined. | Omit |
| Merged mining — future | Would let the same SHA-256 work mine another chain | Money transmission (rewards in a second asset); exchange; custody; securities marketing | Not designed. Any second asset multiplies every question in this table. Flagged so it is not added casually. | STOP — legal review |
03 Features recommended for removal or omission
These were considered and are not built. Each would add substantial regulatory risk without being necessary for mining.
- Pay-per-share (PPS). The operator would pay miners from its own reserve before blocks are found. That is a return produced by the operator's capital rather than by mining results, and it creates a standing credit relationship. PPLNS pays only from actual block rewards.
- Payout-address redirect. Any mechanism — miner-initiated or support-initiated — to send an existing allocation to a different address is the operator moving value on instruction. It is also the classic account-takeover target. Mining with a new address achieves the legitimate goal.
- Miner-adjustable payout threshold. Letting a miner raise the threshold turns the pending-reward ledger into a place to accumulate, which looks like an account. The threshold is fixed and low.
- Conversion to BTC, stablecoins, or fiat. Makes the operator an exchanger. Omitted entirely.
- Any internal marketplace or user-to-user credit. Would be transfer of value between users through the operator. Omitted; no table or endpoint supports it.
- Accounts with passwords and profiles. Not needed to mine. Would collect personal data for no operational reason and would create something for a phisher to take over.
- Referral or affiliate rewards paid in SPMTC. Would be payments unrelated to the recipient's own mining. Omitted.
04 Highest-risk retained features
These stay in the design because the service does not work without them, but each is on the attorney review list and none is final.
- The pending-reward ledger and its hold time. FinCEN's guidance treats a pool's distribution of rewards as integral to mining but does not say how long an undistributed allocation may sit before it looks like an account the operator controls. The daily run, the fixed 1 SPMTC threshold, and the 30-day sweep are the design's answer; counsel must confirm it is sufficient.
- Payout withholding on a screening match. This is the single case where the operator deliberately retains value that would otherwise be paid. It is required by the sanctions posture, but the blocking and reporting mechanics for virtual currency, and the handling of false positives, need counsel's input before the code path exists.
- Pennsylvania licensing generally. Act 7 of 2025 contains no mining or integral-services carve-out, and the pool fee is "consideration". Whether distributing rewards the pool mined is "transmitting virtual currency … with or on behalf of an individual" under section 2(a)(2) is the question that gates opening the pool.
- The pool fee. Necessary and accurately described, but it is also the "fee or other consideration" that Pennsylvania's licensing trigger looks for. Its characterisation must survive counsel's review.