SEC Proposes New Rules for Crypto Fundraising with Exemptions and Safe Harbour

The US Securities and Exchange Commission (SEC) has proposed new rules for crypto fundraising, aiming to create a 'fit-for-purpose framework' for the industry. The proposal includes exemptions for startups and larger fundraising rounds, as well as a safe harbour for certain crypto assets linked to investment contracts.

The SEC believes existing securities rules are not designed for the crypto asset market, leading to complications and impeded capital formation and innovation. Chairman Paul Atkins described this approach as a 'square peg in a round hole' situation.

The proposed framework includes separate limits for startups and larger fundraising rounds. Startups would be allowed to raise up to $5 million over four years under the 'startup exemption', while the 'fundraising exemption' would allow offerings of up to $75 million each year with disclosure requirements tailored to crypto assets.