SEC Proposes Regulation Crypto Assets to Streamline Digital Asset Offerings
The US Securities and Exchange Commission (SEC) has proposed a new rule called Regulation Crypto Assets to establish a framework for regulating cryptocurrency assets. The proposal aims to create exemptions from registration under the Securities Act of 1933 for certain investment contracts involving crypto assets.
The SEC's Proposed Rules would apply to 'covered investment contracts,' which involve a crypto asset that constitutes an investment contract, provided that no other asset is subject to the contract. The definition of a 'crypto asset' generally covers a digital representation of value recorded on a cryptographically secured distributed ledger.
The proposal includes two new exemptions: a startup exemption and a larger fundraising exemption. The startup exemption would allow projects to raise up to $5 million over four years, while the larger fundraising exemption is not specified in terms of funding limits.