SEC Unveils Regulatory Framework for Digital Assets Amid Clarity Act Gridlock

The US Securities and Exchange Commission (SEC) has launched its own regulatory framework for digital assets, dubbed 'Regulation Crypto Assets,' in an effort to provide clarity for token issuers looking to raise capital in the United States.

The move comes as the Clarity Act, a legislation aimed at definitively clarifying the legal status of cryptocurrencies, remains stalled in Congress due to political gridlock.

The SEC's proposal carves out two exemptions within the Securities Act of 1933: one allows for a one-time fundraise of up to $5 million over four years with no standard registration requirement, while the other permits raises of up to $75 million over 12 months with mandatory financial statements and ongoing reporting obligations.

The framework also introduces a conditional safe harbor that would allow tokens to fall outside the legal definition of a 'security' once an issuer has completed or definitively abandoned its managerial work promised to investors.