SEC Proposes Framework for Crypto Capital Formation
The SEC has proposed Regulation Crypto Assets, a framework designed to provide a clearer path for digital asset companies to raise capital without running afoul of traditional securities law.
According to the proposal, smaller issuers can raise up to $5 million over four years with lighter disclosure requirements, while larger raises of up to $75 million in any 12-month window come with more obligations, including financial statements and ongoing reporting.
The proposed safe harbor provision allows a crypto asset to exit securities classification entirely once the founding team no longer controls the network in any meaningful way, which SEC Chair Paul Atkins said is a significant concession that aims to stop entrepreneurs from being pushed offshore.
In response to the announcement, Ethereum climbed 10% to $2,102, while XRP added 6.6% and Solana gained 6.7%, reflecting the market's positive reaction to the SEC's move towards providing clarity on crypto capital formation.