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The Securities and Exchange Commission will consider issuing proposed Regulation Crypto rules on August 14, opening a potential new route for crypto projects to raise capital under federal securities law.
The SEC’s open-meeting agenda says commissioners will consider suggesting release creating a tailored offering regime for certain investment contracts involving crypto assets. Any approved proposal would move into public rulemaking rather than take immediate effect.
August 14 Meeting Could Launch Regulation Crypto Rulemaking
SEC Chair Paul Atkins outlined his vision for Regulation Crypto Assets on March 17, describing three possible components: a startup exemption, a broader fundraising exemption and an investment-contract safe harbor.
Atkins suggested, as illustrative figures, that a startup exemption could last up to four years and permit fundraising of “say $5 million.” He also floated a separate exemption allowing issuers to raise “say $75 million” during any 12-month period.
The SEC has not yet published the August proposed release, so those amounts should not be treated as confirmed terms of the rules commissioners will consider Friday.
Safe Harbor Could Define When Crypto Investment Contracts End
Atkins’s March framework also proposed a safe harbor for certain crypto assets once an issuer has completed or permanently ceased the essential managerial efforts it promised under an investment contract.
The SEC had already issued an interpretation on March 17 explaining how non-security crypto assets can become subject to federal securities laws through an investment contract and how that investment contract can eventually end.
Regulation Crypto would go further by creating formal exemptions through Commission rulemaking.
CLARITY Faces 60-Vote Test on September 15
The SEC effort does not replace congressional market structure legislation. Atkins has said only Congress can create a durable comprehensive framework and that Regulation Crypto would draw heavily from work on the CLARITY Act.
Senate Majority Leader John Thune filed cloture on the motion to proceed to H.R. 3633 before the August recess. The cloture motion will ripen at 2:15 p.m. on September 15 and requires 60 votes. Success would allow the Senate to move toward consideration of CLARITY but would not constitute final passage.
The SEC’s August 14 meeting comes first. If commissioners authorize the proposing release, Regulation Crypto will enter the public rulemaking process while Senate negotiations continue ahead of the September vote.
