- The SEC proposed “Regulation Crypto Assets,” creating tailored exemptions for certain digital asset offerings.
- Crypto startups could raise up to $5 million under a four-year registration exemption, while another exemption covers offerings up to $75 million for one year.
- The proposal arrives as the CLARITY Act struggles in Congress, increasing pressure on regulators to establish crypto rules themselves.
The U.S. Securities and Exchange Commission is moving forward with a new regulatory framework that could make it easier for crypto projects to raise capital without following the full requirements of traditional securities registration.
The proposal, called “Regulation Crypto Assets,” or Reg Crypto, builds on earlier SEC and Commodity Futures Trading Commission guidance outlining how existing securities laws apply to digital assets. SEC Chair Paul Atkins said the framework is intended to support innovation while maintaining investor protections.
SEC Creates New Crypto Fundraising Exemptions
One of the biggest changes is a proposed “startup exemption.” It would allow qualifying crypto projects to raise as much as $5 million without registering the offering under the Securities Act of 1933, with the exemption potentially lasting four years.
A separate fundraising exemption would cover offerings of up to $75 million for one year, potentially giving larger digital asset projects another route to raise capital.
The SEC is also proposing a safe harbor that could allow a digital asset to stop being treated as a security once specific conditions are satisfied and the project’s managerial efforts have effectively ended.
SEC Moves as Congress Struggles With CLARITY
The proposal arrives as the broader CLARITY Act remains stuck in Congress. Lawmakers continue debating issues including stablecoin rewards and ethics provisions involving government officials and their crypto interests.
A procedural Senate vote is expected in September, but the legislative calendar leaves little time to complete the bill.
White House crypto adviser Patrick Witt has indicated that regulators are prepared to move ahead with extensive rulemaking if Congress fails to establish a comprehensive framework.
SEC Commissioner Hester Peirce cautioned that the proposal is only one step toward a broader crypto regulatory system. The public will have 60 days to submit comments before the SEC considers its next steps.
