SEC Proposes Regulation Crypto Assets After Senate Clarity Act Stalls

The SEC under Chair Paul Atkins proposed a new regulatory framework for digital asset fundraising. The move followed the Senate's failure to advance the Digital Asset Market Clarity Act before its August recess.

Dubbed "Regulation Crypto Assets," the proposal creates two pathways for token issuers. A startup-friendly option lets companies raise up to $5 million through token sales over four years. Public filings are required at the start and end of the period. The higher-tier route allows fundraising up to $75 million in any 12-month span. It demands audited financial statements and ongoing reporting, the SEC said.

Both pathways require "principles-based narrative disclosures" to investors. All offerings remain subject to existing anti-fraud and market manipulation laws.

A key component is a safe harbor that prevents certain tokens from being classified as "investment contracts" under securities law. Once an issuer completes its stated management responsibilities, the associated investment contract would no longer face potential security classification. The SEC said the approach aligns with its earlier guidance.

Atkins called the initiative "charting a new course" to foster crypto innovation domestically. He stressed that congressional action remains indispensable. "Future-proofed" regulations are needed to withstand potential rollbacks by subsequent administrations, Atkins said.