US SEC Proposes $75M Crypto Fundraising Exemption

The proposal follows the SEC's March interpretation on how federal securities laws apply to certain crypto assets and transactions. Regulation Crypto Assets is designed for cases where a crypto asset itself may not be a security but is sold through an arrangement that qualifies as an investment contract.

The proposed rules also create a conditional safe harbor that could separate a crypto asset from the investment contract through which investors originally received it. An issuer would need to satisfy specific conditions before the asset could fall outside the investment contract definition under federal securities law.

Atkins said the safe harbor could apply once an issuer has completed or permanently stopped the essential managerial work promised under the investment contract. Commissioner Hester Peirce said the framework would allow an issuer to "delink" a crypto asset from that original contract if conditions are met.

The SEC proposal would also override certain state securities registration and qualification requirements for offerings completed under the new exemptions. Some secondary-market transactions involving those securities would receive similar treatment.

Not final yet

The rules are not final. The SEC opens a 60-day public comment period after the proposal appears in the Federal Register. Crypto companies, investors, and other market participants can respond before the Commission considers a final version.

Atkins continues to describe congressional legislation as necessary despite the SEC's rulemaking. He called legislation "indispensable" for creating rules durable enough to survive changes in future regulatory leadership, while confirming the SEC continues to support CLARITY Act passage.