SEC Proposes Regulation Crypto Assets to Streamline Cryptocurrency Fundraising

The US Securities and Exchange Commission (SEC) has proposed a new rule to regulate cryptocurrency fundraising. The proposal, dubbed Regulation Crypto Assets, aims to create tailored routes for raising capital while retaining disclosure, antifraud, and antimanipulation protections.

The proposal includes two exemptions: the 'startup exemption' which allows issuers to offer up to $5 million of covered investment contracts during a four-year period without registering the offering under the Securities Act. The second exemption is for fundraising offerings of up to $75 million during each 12-month period, with additional obligations including financial statements and ongoing reporting.

The SEC Chairman Paul Atkins argues that this structure addresses a longstanding mismatch between crypto fundraising and securities rules originally developed for conventional companies. Importantly, exemption does not mean exemption from securities law altogether, as issuers using either pathway would remain subject to federal antifraud and antimanipulation provisions.