SEC Proposes New Rule to Regulate Crypto Fundraising with Exemptions

The US Securities and Exchange Commission (SEC) has proposed a new rule to regulate crypto-related fundraising. According to Coinpost, the proposal would create a new exception that exempts investment contracts meeting certain requirements from registration obligations under the Securities Act of 1933.

The core of the proposal is two fundraising exemptions. The first is a 'startup exemption' that would allow raising up to $5 million once over a four-year period. The second is a 'fundraising exemption' that would allow raising up to $75 million every 12 months. Both exemptions apply to crypto-related investment contracts, and issuers must disclose business- and asset-related information to investors under a principles-based approach.

SEC Chairman Paul Atkins said the rule provides a clear path for founders and market participants in the crypto sector to raise funds under federal securities laws. The proposal also includes a safe-harbor provision that would exclude an issuer's crypto assets from being classified as securities if they have completed all promised management actions or permanently halted them.

The SEC has planned to hold a relevant committee meeting for a vote, but it was cancelled due to last-minute scheduling adjustments. A procedural vote is scheduled for mid-September.