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SEC Proposes Token Framework as Congress Fails to Pass Crypto Bill
The SEC proposed a tiered token framework allowing up to $75M in annual issuances. Congress has 14 session days to pass the CLARITY Act before elections reset the calendar.
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The SEC didn't wait for Congress. With lawmakers on recess and the Digital Asset Market Clarity Act stalled, the agency dropped its own proposal for a crypto asset framework.
The proposal lays out conditions for companies to issue tokens without immediately triggering full securities law. The exemptions are tiered: up to $5 million in tokens over four years, or up to $75 million within a single 12-month window. Both tracks require ongoing financial reporting.
One thing missing from the draft: the so-called "innovation exemption" for crypto-based stocks. SEC Chair Paul Atkins said legislation is still needed for a "durable and future-proofed" regulatory framework. The SEC can patch holes, he said, but can't pour a foundation.
The public gets 60 days to comment once the proposal hits the Federal Register. Trade groups, token issuers and law firms are expected to weigh in.
The CLARITY Act, which would have spelled out which federal agencies oversee which parts of the crypto market, didn't reach a vote before the recess. It was supposed to settle years of jurisdictional fighting between the SEC and the CFTC. Without it, regulators are improvising.
Senate Majority Leader John Thune filed a motion to bring the CLARITY Act back to the floor when the Senate reconvenes in mid-September. But there are only 14 days in session before another break, this time ahead of the November elections.