The Securities and Exchange Commission introduced a new set of rules on Tuesday, aiming to establish a clear regulatory framework for investment contracts involving cryptocurrency assets.
New Federal Exemptions for Crypto
The proposed rules comprise two exemptions from the Securities Act of 1933 registration requirements.
The first exemption would give cryptocurrency firms a one-time allowance to issue up to $5 million in tokens over four years, as well as the ability to conduct offerings of up to $75 million annually. Both exemptions require issuers to provide certain “principles-based narrative disclosures” to investors.
In other words, the SEC’s proposal would exempt certain cryptocurrency companies and token offerings from U.S. securities regulations, potentially making it easier for companies to issue tokens and raise capital.
Once a project has finished the key managerial efforts it promised under the investment contract, the cryptocurrency asset itself can qualify for a “safe harbor,” so it is no longer treated as a security.
In addition, offers and sales made under these new federal exemptions would not need separate state-level securities registration.
SEC Chair Calls it ‘Most Historic Step’
SEC Chair Paul Atkins said the agency has taken “the most historic step” to modernize federal securities regulations for cryptocurrencies.
“As the Crypto Capital of the World, the U.S. must and will lead. Regulation Crypto Assets will ensure that we do,” Atkins added.
Atkins said the SEC supports the congressional progress on the CLARITY Act and expects the bill to become law soon.
A Crypto-Friendly Regulatory Regime
Earlier this year, the SEC issued an interpretation clarifying that “most cryptocurrency assets,” including non-fungible tokens and dollar-backed stablecoins, aren’t securities. The new guidance differed sharply from the Gary Gensler-led SEC, which viewed cryptocurrencies other than Bitcoin (CRYPTO: BTC) as securities.
Notably, Project Crypto—a joint regulatory initiative led by the SEC and the CFTC to modernize digital asset regulation—has been set into motion.
Meanwhile, CFTC Chair Mike Selig teased the inaugural meeting of the “Innovation Advisory Committee,” scheduled for Thursday, positioning the agency to support blockchain, AI, and prediction markets by moving away from “regulation by enforcement.”
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