SEC Proposes New Rules for Crypto Token Fundraising
The US Securities and Exchange Commission (SEC) has proposed new rules that could allow crypto projects to raise up to $75 million annually without full registration, reopening public token fundraising in the US. The proposal includes two exemptions: one for early-stage startups to raise up to $5 million over four years, and another for larger projects to collect up to $75 million during a 12-month period.
Investors had been looking forward to clearer rules that would allow legitimate token projects to raise capital in the US. However, venture investors point out that the market demand for new tokens has fallen sharply since the ICO boom of 2017 and 2018, with capital now concentrated around major crypto assets and other speculative markets.
The proposal is open for public comments for 60 days following its publication in the Federal Register. It includes a conditional safe harbor provision that would allow a crypto asset to stop being subject to an investment contract once the issuer has completed or permanently ended the managerial work promised to investors.