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.
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