SEC Proposes New Crypto Rules to Replace Outdated Framework

The US Securities and Exchange Commission (SEC) has proposed new rules to regulate cryptocurrency-based fundraising activities. SEC Commissioner Hester M. Peirce stated that the agency's prior 'enforcement-first' approach was 'inapt' for crypto and left much of the market operating under uncertainty.

Pierce argued that the shift towards clearer rules is a step towards putting 'clear, sensible, enforceable rules in place for crypto offerings.' The proposal aims to create a framework for certain investment contracts involving crypto assets, allowing eligible entities to raise capital while maintaining investor protections.

The SEC's action follows Senate inaction on the Digital Asset Market Clarity (CLARITY) Act. SEC Chairman Paul S. Atkins stated that the agency's earlier enforcement-focused strategy has driven investment offshore, limiting the protections it can provide to investors within the US.