SEC Ditches Holding Periods for Crypto Insiders

The SEC has proposed a new regulation for crypto assets that would allow insiders to sell their tokens on day one, in contrast to the Senate's draft bill, which would impose a mandatory holding period of at least 12 months.

The SEC's proposal treats tokens as freely tradable as soon as they are acquired by a buyer, unless otherwise restricted by the issuer or another law. Insiders typically have more information about a token project than the public, and their incentives may not align with those of other investors.

The Senate's CLARITY draft would require insiders to hold onto tokens for at least 12 months before network control certification, and then an additional six months after certification. The bill also limits how much insiders can sell, but the SEC's proposal skips these requirements.