US SEC to propose first Regulation Crypto rule

A new initiative could give eligible crypto firms a clearer pathway to raise capital without relying on traditional securities registration requirements.

The US Securities and Exchange Commission (SEC) will hold an open meeting on 14 August to decide whether to publish the first proposed rule under its ‘Regulation Crypto’ initiative.

The proposal is expected to establish a tailored regulatory framework for certain crypto-asset offerings and transactions involving investment contracts. If commissioners approve its publication, the text will enter a public consultation rather than immediately creating new legal obligations.

SEC Chair Paul Atkins previously outlined possible exemptions that would allow eligible crypto start-ups to raise limited amounts of capital under simplified disclosure requirements rather than completing conventional securities registration.

A separate fundraising exemption could cover larger offerings, while an investment contract safe harbour could clarify when a crypto asset is no longer subject to federal securities laws because its issuer has completed or permanently ceased the essential managerial work promised to investors.

The initiative could consequently provide crypto projects with clearer routes for raising capital while preserving disclosure and investor-protection requirements. The precise eligibility conditions, financial limits and safeguards will depend on the proposal approved by the Commission.