Image credit: Shutterstock
- Community banking and investment-management groups sought changes to the SEC’s proposed crypto fundraising rules as the comment deadline arrived.
- The ICBA asked the SEC to assess whether its framework could redirect bank deposits toward stablecoin issuers and constrain local lending.
- The proposed Regulation Crypto Assets framework, which remains a proposal, would let eligible issuers sell certain unregistered investment contracts.
Community banking and investment-management groups sought changes to the Securities and Exchange Commission’s (SEC) proposed crypto fundraising rules as its Oct. 20 comment deadline arrived. Their requests include an assessment of potential bank-deposit losses and clearer investor disclosures and resale rules.
Community Banks Request Analysis of Deposit Risks
The Independent Community Bankers of America (ICBA) asked the SEC to assess whether its broader crypto framework could redirect deposits from community banks toward stablecoin issuers, exchanges, and custodians. It argued that more concentrated funding could increase banks’ costs and constrain local lending.
The group requested a supplemental economic analysis developed with federal banking agencies. It also wants monitoring and safeguards before the SEC finalizes the proposal.
ICBA did not claim the offering proposal alone would necessarily cause measurable deposit losses. Its objection concerns the combined effects of offering exemptions and related initiatives affecting trading, custody and tokenization.
SEC Proposes Exemptions for Crypto Fundraising
Proposed Regulation Crypto Assets would let eligible issuers sell certain investment contracts involving crypto assets without registering those offerings. One exemption would permit up to $5 million over four years, while another would allow up to $75 million in each 12-month period.
Issuers would still face disclosure requirements and federal antifraud and antimanipulation provisions. The framework also includes a conditional safe harbor under which an investment contract could cease being treated as a security. The exemptions and conditional safe harbor remain proposals.
Investment Managers Seek Clearer Rights and Resale Rules
The Alternative Investment Management Association (AIMA) supported a tailored framework but requested changes to make investments easier to assess, hold and resell. It wants disclosures that distinguish a token’s utility or economic exposure from enforceable ownership, redemption and cash-flow rights.
AIMA also called for timely reporting of security incidents, changes in protocol control and significant changes in token supply or insider holdings. It said blockchain data should supplement disclosures identifying who owes investors legal obligations and explaining arrangements outside the blockchain.
AIMA wants a safe harbor allowing funds to sell portfolio holdings without automatically being treated as underwriters. It also wants consistent classification across securities, adviser, and fund laws so regulatory changes do not disrupt portfolio compliance or custody arrangements.
