U.S. Securities and Exchange Commission (SEC) hosted an open meeting on the proposal for Regulation Crypto Assets on August 14. The proposal would create a bespoke offering regime under the Securities Act for investment contracts that involve the offer of crypto assets, replacing guidance and policy statements issued by staff with regulations that are more permanent.
SEC Chairman Paul Atkins has ranked crypto rulemaking as a top priority for the agency. The commission, which consists of three commissioners, will vote on whether to approve the publication of the proposal for a public comment period, marking the start of the rulemaking process for implementing more permanent rules for digital asset firms.
The proposal follows a Senate vote on the Digital Asset Market Clarity Act that did not advance before the August recess. TD Cowen analyst Jaret Seiberg wrote the SEC proposal could be the first in a series of proposals for crypto regulations, as the move by lawmakers to support legislative rules did not go through.
Regulation Crypto is expected to provide an exemption for qualifying crypto projects to raise capital without automatically triggering SEC registration requirements.
It may also describe situations where its securities jurisdiction no longer applies to projects once the managerial efforts involved in an investment contract have been exhausted.
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The bill could also answer one long-standing question in US crypto regulation: whether an asset that initially qualifies as an investment contract will always remain a security. With the SEC writing the rules, it will be able to provide more clarity to issuers over what compliance means at each stage in a project’s lifecycle.
