SEC Proposes Regulation Crypto Framework for Token Issuance and Exit

The US Securities and Exchange Commission (SEC) has proposed a new framework for token issuance and exit, dubbed Regulation Crypto. According to Alex Thorn from Galaxy, this proposal could bring regulated routes for U.S. token issuance before 2027.

Regulation Crypto would allow qualifying issuers to raise up to $5 million over four years or $20 million or $75 million annually through two fundraising exemptions. Issuers would need to provide specific disclosures and filings, including information about token supply, release schedules, minting, burning, governance, and smart-contract permissions.

The proposal also addresses what happens after an issuer finishes its promised development work, allowing the related investment contract to cease to exist under certain conditions. This safe harbor could help address assets with unresolved securities-law status, potentially covering up to 475 issuers annually.