SEC Set to Unveil Formal Reg Crypto Rules for Digital Asset Contracts
The US Securities and Exchange Commission (SEC) is moving towards formal 'Reg Crypto' rules, which could shift from enforcement-led regulation to a tailored regime for digital asset contracts.
Commissioners will vote on publishing the proposal, followed by a public comment period. This represents a departure from past approaches, where the crypto industry relied on court decisions and individual administrative positions.
The core issue is distinguishing between a token itself and its offering or sale structure. The 'Howey' test determines if there's an investment of money in a common enterprise with a reasonable expectation of profits derived from others' efforts.
Reg Crypto aims to provide a more practical answer to this question: If a token is offered as part of an investment contract, how can it legally raise capital without undergoing the entire traditional registration regime?