SEC Unveils Crypto Rules, Paving Way for Industry Growth
The Securities and Exchange Commission (SEC) has unveiled new rules for cryptocurrencies, which are being hailed as a win for the digital asset industry. The proposal, titled 'Regulation Crypto Assets', provides a clearer route to raising capital under federal securities law for crypto entrepreneurs.
The SEC's move comes after the US Senate left Washington without advancing the Digital Asset Market CLARITY Act (H.R. 3633), which would split oversight of digital assets between the SEC and the US Commodity Futures Trading Commission.
The proposal sets out two new exemptions: a 'startup exemption' that allows an issuer to raise up to $5 million over a four-year period without registering the offering, and a 'fundraising exemption' that permits raises of up to $75 million within any 12-month stretch. Issuers relying on this route would still need to publish financial statements and meet ongoing reporting duties.
The proposal also sets out a conditional safe harbour that could eventually place certain tokens outside the legal definition of a security, once an issuer has finished or permanently abandoned the managerial efforts it promised investors.