The U.S. Securities and Exchange Commission (SEC) is taking a major step toward giving the crypto industry something it has been asking for years: clearer rules.
On Tuesday, the SEC proposed a new regulatory framework for crypto assets, marking one of the first major efforts under President Donald Trump’s administration to create rules specifically suited to the digital asset industry.
Crypto companies have long argued that applying traditional securities laws to tokens does not always make sense and has left businesses unsure about what they can and cannot do.
What will the new rules change?
Under the framework, certain crypto companies and token offerings could be exempt from some U.S. securities requirements. In practical terms, this could make it easier for crypto startups to issue tokens and raise money without having to navigate the full securities rulebook.
One proposed exemption would allow companies to issue up to $5 million in crypto tokens over a four-year period. A broader exemption would allow offerings of up to $75 million in any 12-month period.
That does not mean crypto companies would get a completely free pass. Companies using the larger exemption would still have to provide financial statements and follow regular reporting requirements. Token issuers would also have to disclose certain information to investors under both exemptions.
SEC Chairman Paul Atkins said the proposal is designed to give crypto entrepreneurs and market participants a clearer way to raise capital while still operating within federal securities laws.
SEC proposes safe harbor for certain crypto assets
Another major part of the proposal is a safe harbor for certain crypto assets. If an asset meets specific conditions, it could avoid being classified as an investment contract. That matters because assets considered investment contracts can fall under securities laws and face considerably more regulatory requirements.
For crypto companies, having a clearer definition could remove some of the uncertainty that has surrounded token launches in the U.S. For investors, meanwhile, the disclosure requirements could provide more information about the projects and companies they are putting money into.
The proposal is significant, but it is not the final rule yet. The SEC can still receive feedback and make changes before deciding whether and how to implement the framework.
Still, the direction is notable. Rather than forcing crypto companies to fit entirely into rules created for traditional financial markets, the SEC is proposing a framework that recognizes some of the industry’s unique characteristics.
If adopted, the rules could make it easier for legitimate crypto businesses to raise capital in the U.S., while giving investors and companies a clearer understanding of where the regulatory boundaries actually lie.
