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

The US Securities and Exchange Commission (SEC) has proposed a new regulation aimed at helping cryptocurrency projects raise funds without being classified as securities. The proposal, titled Regulation Crypto Assets, would create a framework for token projects to raise up to $75 million under crypto-specific rules.

Currently, when a project raises money by promising to build a network and make the token useful, it can be considered an investment contract under federal securities law. This new regulation aims to cover this bargain from start to finish, providing a clear path for projects to raise funds without being subject to strict securities regulations.

The proposal would create three lanes for token financing: a small startup exemption, a larger fundraising exemption with two tiers ($20 million and $75 million), and a separate filing process for ending the investment contract once the issuer has completed or permanently stopped its work.