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The U.S. Securities and Exchange Commission has proposed new rules that would create tailored fundraising requirements for certain investment contracts involving crypto assets. The August 18 proposal, called Regulation Crypto Assets, includes two exemptions from the registration requirements of the Securities Act of 1933.
The proposal follows the SEC’s March interpretation clarifying how federal securities laws apply to certain crypto assets and transactions. The new rules remain at the proposal stage and will be open for public comment for 60 days after publication in the Federal Register.
SEC Proposes Two Crypto Fundraising Exemptions
The first proposed exemption would allow offerings of up to $5 million during a four-year period. A second fundraising exemption would permit offerings of up to $75 million during each 12 months.
Both would require issuers to provide principles-based disclosures to investors and remain subject to federal antifraud and antimanipulation rules. Issuers using the $75 million exemption would also face financial statement and ongoing reporting requirements. SEC Chairman Paul Atkins said:
“The proposal “seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws.”
Safe Harbor Could Clarify When SEC Oversight Ends
Regulation Crypto Assets also proposes a conditional safe harbor addressing when a crypto asset would no longer be considered subject to an investment contract. Under the proposal, an issuer would need to satisfy specified conditions, including certifying that promised essential managerial efforts have ended or permanently ceased.
If those conditions are met, the crypto asset would no longer be deemed subject to an investment contract for purposes of the federal securities-law definitions covered by the proposal. The rules would also preempt certain state registration and qualification requirements for qualifying offerings and secondary-market transactions.
Proposal Arrives as Congress Debates Crypto Rules
The SEC proposal comes as Congress separately considers broader legislation governing digital asset market structure. Reuters reported that industry groups welcomed the SEC action but remain concerned that agency rules could be changed by future administrations without legislation from Congress.
The SEC will consider public feedback before deciding whether to adopt final rules. Until then, the proposed exemptions and safe harbor do not represent final regulatory requirements.
