SEC Proposes Rule for Simplified Crypto Fundraising
The SEC has proposed a rule to simplify fundraising for crypto startups by allowing them to sell digital assets without registering them as securities. The proposal, which includes two tracks with different limits, aims to provide regulatory clarity in the absence of congressional action on crypto legislation.
The first track allows companies to raise up to $5 million in digital assets over a four-year period, while the second track permits raises of up to $75 million over 12 months. However, firms opting for the larger exemption must submit financial records and fulfill recurring reporting obligations, as detailed in the proposal.
SEC Chairman Paul Atkins framed the rule as addressing a long-standing question in the blockchain community: 'How can I raise capital to develop a crypto asset while I am still working to develop the network where it will be used.'