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SEC Pulls Crypto Rulemaking Meeting; Atkins Exemptions on Hold
The SEC pulled its Aug. 14 meeting on crypto token exemptions. With Congress stalled on market-structure legislation, both rulemaking tracks are now paused.
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The Securities and Exchange Commission on Thursday abruptly canceled an open meeting that had been scheduled for Friday, Aug. 14, to consider proposed exemptions for digital asset companies. The SEC said the meeting was moved "due to an unforeseen scheduling issue," according to Reuters. The agency did not announce a new date.
The cancellation postpones a vote on whether to propose exemptions that could allow crypto startups to raise capital without complying with traditional securities-offering requirements. The meeting would not have produced final regulations. It could have launched a formal notice-and-comment rulemaking process for an industry that long argued existing securities rules do not fit digital assets.
The delay arrives at a consequential moment. Congress has again failed to complete work on comprehensive digital-asset market-structure legislation, leaving the SEC and Commodity Futures Trading Commission increasingly responsible for filling the regulatory gap.
Under SEC Chair Paul Atkins, the commission has reversed much of its previous approach to digital assets and outlined plans to revise capital-markets regulations to accommodate tokens and blockchain-based trading. The previous SEC leadership sued multiple crypto companies on the theory that their tokens were securities and that the companies had violated registration and disclosure requirements. Atkins has backed the industry's argument that many tokens should instead be treated as commodities.
Atkins has discussed several possible exemptions. One would create a safe harbor making it easier for companies to sell tokens and raise capital. A "fit-for-purpose startup exemption" could permit cryptocurrency entrepreneurs to raise a specified amount or operate for a limited period without complying with some SEC requirements. The agency is separately developing an "innovation exemption" that could allow experimentation with business models such as blockchain-based stocks without all existing disclosure and investor-protection rules.