SEC Proposes Sweeping Crypto Regulations Amid Industry Lobbying Efforts
The US Securities and Exchange Commission (SEC) has proposed Regulation Crypto Assets, a sweeping regime that would allow many public token offerings to proceed without Securities Act registration.
The proposal, announced on August 18, would give existing crypto projects a self-certified path out of securities-law treatment, effectively treating tokens as commodities rather than securities.
This move is seen as a significant boon for the crypto industry, which has spent years lobbying for easier access to retail investors and immediate token liquidity. However, critics argue that the proposal relies on aggressive interpretations of existing statutory authority and attempts to construct a public capital-raising regime without Congressional authorization.
The proposal includes four principal components: a startup exemption allowing issuers to offer up to $5 million of covered investment contracts over four years; a fundraising exemption permitting offerings of up to $20 million under Tier 1 or $75 million under Tier 2 during any 12-month period; Rule 400, which deems a covered investment contract to have ended after the issuer certifies that it completed, or permanently ceased, the managerial efforts it promised investors; and Rule 500, which preempts state registration and qualification laws for new offerings and many qualifying secondary-market transactions.