SEC Crypto Proposal Offers New Paths for Crypto Asset Issuers
SEC Crypto News: The Securities and Exchange Commission proposed Regulation Crypto Assets, a framework that would allow eligible projects to raise up to $75 million in any 12-month period without registering the offering under the Securities Act. The proposal also includes a conditional safe harbor under which a crypto asset could be deemed not subject to an investment contract if specified conditions are met.
- Fundraising exemption: Up to $75 million per 12-month period, with financial statements and ongoing reporting requirements.
- Startup exemption: Up to $5 million over a four-year period, with principles-based narrative disclosures.
- Investment contract safe harbor: A conditional path under which a crypto asset could be deemed not subject to an investment contract.
The proposal creates two exemptions from the Section 5 registration requirements for certain investment contracts involving crypto assets, which the SEC refers to as covered investment contracts.
The smaller route would cap offerings at $5 million over four years. The larger fundraising exemption would permit offerings of up to $75 million during each 12-month period.
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