SEC Proposes Exemptions for Crypto Projects to Raise Funds Without Registration

The Securities and Exchange Commission (SEC) has proposed new rules that would allow crypto projects to raise funds without requiring full securities registration. The proposal, known as 'Regulation Crypto Assets,' includes two exemptions: one for startups that can raise up to $5 million over four years, and another for token issuers that can raise up to $75 million every 12 months if they provide financial statements and ongoing reports.

Both exemptions would require disclosures, while federal antifraud and antimanipulation rules would still apply. The proposal also includes a conditional safe harbor allowing an issuer to 'delink' a crypto asset from the investment contract through which it was sold.

The move comes after the SEC canceled a meeting on Regulation Crypto Assets last week due to reported pressure from Wall Street and the White House. SEC Commissioner Hester Peirce acknowledged that the proposed exemptions would not cover every type of crypto project, calling on the industry to provide feedback on how the rules should evolve.

The proposal aims to accommodate innovation while protecting investors and market integrity, according to Peirce. The move also follows the recent setback in negotiations over the Clarity Act, which would have formally legalized most crypto activity in the United States.