SEC Proposes Regulation Crypto Assets with Potential to Unlock US Token Market
The Securities and Exchange Commission (SEC) has proposed Regulation Crypto Assets (Reg Crypto), a set of rules designed specifically for the offer and sale of crypto assets. The proposal would create a lawful path to sell certain tokens to the US public, including non-accredited buyers, without a registered offering.
Under Reg Crypto, issuers can raise up to $5 million over four years with public filings at the beginning and end of the period. A larger exemption modeled on Regulation A would permit offerings of up to $20 million or $75 million over 12 months. Issuers would be required to provide purpose-built information covering token supply and release schedules, mint-and-burn mechanics, governance and smart-contract permissions, source code, and what the issuer promised to build and how far along it is.
The proposal also introduces a formal mechanism for the investment contract associated with a token to cease to exist once the issuer has completed or permanently ceased its essential managerial efforts. This would allow issuers to transition from an investment contract to a security that can be traded without restrictions.