SEC Proposes Clearer Crypto Fundraising Rules Under Regulation Crypto Assets

The Securities and Exchange Commission (SEC) has proposed new rules to help crypto projects raise money in the United States, while requiring investor disclosures and ongoing reporting for larger offerings.

According to the proposal, Regulation Crypto Assets, qualifying issuers can raise up to $5 million over four years or up to $75 million in each 12-month period. Both options require issuers to provide principles-based narrative disclosures to investors.

Issuers using the larger exemption would face additional obligations, including providing financial statements and continuing to make reports after the offering. This is aimed at giving investors more information about the issuer's condition and operations.

The proposal also includes a conditional safe harbor related to the definition of an investment contract. A crypto asset could be treated as no longer subject to an investment contract when an issuer has completed or permanently stopped the essential managerial work it told purchasers it would perform.