$25M Audit Rule for Crypto Projects Hits Roadblock in US Senate

A proposed rule requiring crypto projects that raise more than $25 million from the public to disclose audited financial statements has stalled in the US Senate. The Digital Asset Market CLARITY Act, which included this requirement, failed to move forward after a vote on September 15.

Sen. Cynthia Lummis, a key sponsor of the bill, said Democrats had asked for the audit requirement during negotiations but later voted against the bill. 'Democrats voted against the transparency they asked for,' she wrote.

The rule would have applied to certain token issuers whose tokens still depended on the company or people behind them. Issuers raising more than $25 million would have had to provide the SEC with audited financial statements, while those raising less than $25 million would have faced a lighter requirement of an independent review.

The proposed Regulation Crypto exemption would have allowed qualifying projects to raise up to $50 million per year, with a $200 million lifetime limit. Democrats wanted investors to get more information when buying tokens tied to a specific company or development team.