SEC Proposes Regulation Crypto Assets Framework
The Securities and Exchange Commission (SEC) has proposed a tailored framework for raising capital with crypto assets, which would allow them to cease being subject to federal securities laws under certain conditions.
The proposal, called Regulation Crypto Assets (Reg CA), aims to provide a safe harbor from the 'investment contract' designation, allowing issuers to complete their essential managerial efforts and file a transition report to exit securities status.
Reg CA would establish two new exemptions: a 'startup exemption' for offerings up to $5 million over four years and a 'fundraising exemption' for up to $75 million per 12-month period, modeled after Regulation A.
The proposal also includes a preemption of state law, defining 'qualified purchaser' to exempt covered investment contracts from state registration and qualification requirements.