SEC Proposes Rules to Streamline Crypto Asset Capital Formation
The Securities and Exchange Commission (SEC) has proposed new rules to streamline capital formation for digital asset entrepreneurs. Dubbed 'Regulation Crypto Assets,' the proposed rule will be open for a 60-day public comment period following its publication in the Federal Register.
The proposed rules include two exemptions from the registration requirements of the Securities Act of 1933 that are tailored to certain investment contracts involving crypto assets: a one-time exemption that would permit offerings of up to $5 million during a four-year period, and an exemption that would permit offerings of up to $75 million during each 12-month period.
In addition, the proposed rules include a conditional safe harbor from the term 'investment contract' in the definitions of 'security' in the Securities Act of 1933, and preempt state securities law registration and qualification requirements regarding offers and sales of securities issued pursuant to an exemption in Regulation Crypto Assets.
SEC Chairman Paul S. Atkins said that Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws. He added that 'Congress designed our securities laws to amplify, within specific guardrails, opportunities for entrepreneurs to innovate and build new products.'