SEC Proposes Groundbreaking Crypto Regulation Framework

The U.S. Securities and Exchange Commission has proposed a new regulatory framework for crypto assets that could significantly reshape how digital asset projects raise capital in the United States.

Dubbed “Regulation Crypto Assets,” the proposal would establish a tailored securities regime for certain investment contracts involving crypto assets. The SEC said the framework is designed to reduce regulatory barriers for crypto entrepreneurs while maintaining investor protections under federal securities laws.

The proposal includes two new exemptions from securities registration requirements. One would allow an issuer to raise up to $5 million over a four-year period, while another would permit offerings of up to $75 million during any 12-month period.

Issuers using the exemptions would still face disclosure requirements. Projects relying on the larger exemption would also have to provide financial statements and comply with ongoing reporting obligations.

The SEC is also proposing a conditional safe harbor that could eventually allow certain crypto assets to fall outside the definition of an “investment contract.” The provision would apply once an issuer has completed or permanently stopped the essential managerial efforts it had promised to undertake under the investment contract, provided the other conditions of the safe harbor are met.