U.S. SEC considers creating regulatory exit for crypto projects, reviews securities registration exemption

The U.S. Securities and Exchange Commission is considering writing a new rule that could allow crypto projects to raise early-stage funding without registering securities. With Congress delayed on digital asset legislation, the move is seen as an effort by the SEC to fill a regulatory gap in the crypto market through its own rules.

Blockchain outlet Decrypt reported on Aug. 11 that the SEC plans to hold an open meeting on Aug. 14 to discuss whether to propose what it calls “Regulation Crypto.”

At the core is creating a separate regulatory framework so crypto projects do not have to follow all existing securities registration procedures when raising funds in the early stage. The SEC is also reviewing a plan that would allow projects to fall outside the SEC’s regulatory scope later if they meet certain conditions. It would exclude projects from regulation once they become sufficiently decentralised and founders or developers no longer actively manage the network.

A notice the SEC released on Aug. 10 included a plan to create a tailored regulatory framework for certain digital asset issuance. If the agenda item moves into a public comment process, it would start a formal rulemaking process that could apply across the industry, going beyond individual staff statements or interpretations this year.