SEC Drafts Crypto Regulations Amid Stalled Congressional Bill

The US Securities and Exchange Commission (SEC) is moving forward with enacting regulations for cryptocurrency investments. This comes as Congress struggles to pass the CLARITY Act, which aims to provide clarity on the classification of digital assets.

The SEC will soon publish 'Regulation Crypto Assets' in the federal register, allowing for public commentary before finalization of the proposed rules.

The new regulations aim to create two classes of exemptions for crypto investments regarding standard registration requirements. This includes a 'startup exemption,' which would exempt offerings of up to $5 million from registration requirements during a four-year period, and a 'fundraising exemption,' which would exempt offerings of up to $75 million from registration requirements within each 12-month period.

The regulations also propose an 'investment contract safe harbor' that would provide a conditional safe harbor from the term 'investment contract' in the definitions of 'security' in the Securities Act and the Securities Exchange Act of 1934.