SEC Proposes Rules to Streamline Capital Formation for Digital Asset Entrepreneurs

Dubbed “Regulation Crypto Assets,” the proposed rule will be open for a 60-day public comment period following its publication in the Federal Register, according to the release.

The proposed rules include two exemptions from the registration requirements of the Securities Act of 1933 that are tailored to certain investment contracts involving crypto assets: a one-time exemption that would permit offerings of up to $5 million during a four-year period, and an exemption that would permit offerings of up to $75 million during each 12-month period, the release said.

In addition, the proposed rules include a conditional safe harbor from the term “investment contract” in the definitions of “security” in the Securities Act of 1933, and preempt state securities law registration and qualification requirements regarding offers and sales of securities issued pursuant to an exemption in Regulation Crypto Assets, per the release.

“As we continue the Commission’s efforts to provide clarity for crypto markets, and as Congress works to establish a lasting regulatory framework, Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws,” SEC Chairman Paul S. Atkins said in the release.