SEC digital asset rules could unlock billions in new capital

The Securities and Exchange Commission has put forward a proposal that would give digital asset issuers new, tailored routes to raise capital under federal securities law.

Named Regulation Crypto Assets, the proposal sets out two exemptions from registration requirements under the Securities Act of 1933. The first would let issuers raise up to $5m through a one-time offering over a four-year period.

The second would permit repeated raises of up to $75m in any 12-month window. Issuers relying on either route would need to provide investors with principles-based narrative disclosures, while those using the larger exemption would face additional obligations, including financial statement disclosure and ongoing reporting.

The rules also introduce a conditional safe harbour that would remove certain crypto assets from the definition of “security” under the Securities Act of 1933 and the Securities Exchange Act of 1934, provided specific conditions are met.

Where those conditions are satisfied, offerings made under a Regulation Crypto Assets exemption, along with certain secondary market transactions, would be shielded from state-level securities registration and qualification rules, replacing a patchwork of state requirements with a single federal standard.