SEC Proposes Regulation for Cryptocurrency Projects to Raise Up to $75 Million

The US Securities and Exchange Commission (SEC) has proposed a new regulation called Regulation Crypto Assets that aims to provide a clear path for cryptocurrency projects to raise up to $75 million before ending their token's securities contract. This move is seen as a significant step towards regulating the crypto industry, which has been largely unregulated until now.

According to the proposal, there are three fundraising paths: a startup exemption that allows raising up to $5 million, and two larger tiers (Tier 1 and Tier 2) that allow raising $20 million and $75 million respectively. The regulation also establishes a filing process for ending the investment contract once the issuer has completed or permanently stopped the work it promised.

The SEC's proposal builds on its March interpretation of federal securities law, which states that a 'crypto asset' can participate in a securities transaction without retaining the same legal status forever. The regulation separates the token from the bargain, allowing regulators to treat later token transfers separately from the fundraising transaction.