SEC proposes crypto fundraising rules allowing up to $75 million and exit from securities contract
This digest was compiled by AI from multiple sources — links to the originals are below.
The U.S. Securities and Exchange Commission proposed Regulation Crypto Assets, creating paths for token projects to raise up to $75 million. The proposal, published in the Federal Register on Aug. 21, also establishes a filing process to end the investment contract once the issuer completes or permanently stops the promised work. Comments are due Oct. 20 before the commission votes on a final rule.
Key Facts
- The SEC's proposed Regulation Crypto Assets would allow token projects to raise up to $75 million under crypto-specific rules.
- The proposal was published in the Federal Register on Aug. 21, with comments due by Oct. 20.
- Rule 400 would create a safe harbor allowing issuers to file for termination of the investment contract once promised work is completed or permanently stopped.
- The proposal builds on the SEC's March interpretation that a crypto asset can participate in a securities transaction without retaining that status forever.
- The framework includes a small startup exemption and a larger fundraising exemption with two tiers.
Regulation Crypto Assets
The SEC's proposed Regulation Crypto Assets creates routes for projects to raise up to $75 million under crypto-specific rules. It also establishes a filing process for ending the investment contract once the issuer has completed or permanently stopped the work it promised. The proposal entered the Federal Register on Aug. 21, and comments are due Oct. 20. The commission must review those submissions and vote on a final rule before any project can use the new exemptions.
Token and Contract Separation
The proposal builds on the SEC's March interpretation of federal securities law, under which a crypto asset can take part in a securities transaction without retaining the same legal status forever. The security is the covered investment contract, meaning the transaction and promises that connect a buyer's money to the issuer's essential managerial work. The token is the digital object recorded on-chain, while the bargain is the buyer's decision to fund a team that has promised to build the software, secure the network, and create the conditions for the token's use. Once those promises have been fulfilled, or the issuer has permanently stopped trying to fulfill them, the investment contract can cease to exist. Rule 400 would turn that principle into a safe harbor with a public filing and a written explanation from the issuer.
Fundraising Exemption Tiers
The proposal divides token financing into a small startup exemption and a larger fundraising exemption with two tiers. The safe harbor would be available to any qualifying issuer, even if it raised money through Regulation D, another exemption, or a structure outside the two new fundraising paths. Regulation Crypto Assets therefore reaches beyond the offerings conducted under its own $5 million, $20 million, and $75 million limits.
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SEC proposes crypto fundraising rules allowing up to $75 million and exit from securities contract
