SEC Proposes Rules to Exempt Some Crypto Issuers from Registration

The Securities and Exchange Commission (SEC) has proposed new rules that aim to clarify which digital assets are securities and which fall outside its jurisdiction. The proposal comes as part of a broader effort by the SEC to reverse course from the previous administration's approach, known as 'regulation by enforcement.'

Under the proposed rules, certain crypto issuers would be able to raise up to $5 million over four years without registering their offerings. Other issuers could raise up to $75 million in any 12-month period, but they would face additional disclosure and ongoing reporting requirements.

The proposal also creates a safe harbor that could allow a token to eventually fall outside of securities laws if certain conditions are met. This includes showing that the blockchain has become sufficiently independent from the issuer's managerial efforts.