Crypto▲ Bullish
SEC Proposes Crypto Offering Exemptions Up to $75 Million
The SEC proposed new exemptions for crypto projects to raise up to $5M or $75M, including a safe harbor for when developer efforts end. Comments due in 60 days.
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The Securities and Exchange Commission on Aug. 18 proposed a rule creating a securities offering structure for some crypto assets. The proposal, called Regulation Crypto Assets, includes two exemptions from registration.
A qualifying issuer could raise up to $5 million over four years under one exemption. The second permits up to $75 million in a 12-month period. Both require principles-based narrative disclosures. The larger exemption also demands financial statements and ongoing reports after the offering.
The rule includes a conditional safe harbor. Under it, a crypto asset may no longer be treated as subject to an investment contract when an issuer has completed or permanently stopped the essential managerial work it promised purchasers. SEC Chairman Paul S. Atkins said the safe harbor applies once an issuer has finished or permanently ceased "all essential managerial efforts" represented under an investment contract.