The Securities and Exchange Commission (SEC), which oversees US securities markets, proposed a new rule called Regulation Crypto Assets on August 18 US time (August 19 Korea time) that crypto projects can use when raising funds by selling tokens. It follows up on guidance the SEC issued in March stating that most crypto assets are not themselves securities. If a token sale is judged to be an investment contract, registration and disclosure obligations similar to those for a general securities offering can arise, and the SEC is seeking to create a separate procedure matched to a project's size and stage of growth. Under the proposal, early-stage projects could raise up to 5 million dollars over four years on the condition that they disclose basic information about the business and the token to investors. Larger projects could raise up to 75 million dollars over 12 months, on the condition that once the amount raised exceeds a certain threshold they submit audited financial statements and continue to report periodically thereafter. The proposal also includes a conditional standard for determining whether federal securities laws should continue to apply to a token, separating it from the original investment contract, once the issuing team has either completed all of the key managerial activities it promised investors or permanently ceased them and meets the requirements set out in the rule. If the rule is adopted as proposed, tokens issued through this path would not be subject to individual states' separate securities registration and review requirements, and the same treatment would carry over to subsequent secondary market trading. That said, not all token sales become unrestricted, and even with an exemption the federal provisions prohibiting fraud and market manipulation still apply. Because this is not yet a finalized rule, it cannot be used right now: after publication in the Federal Register there will be a 60-day public comment period, followed by another SEC vote.
US SEC Proposes Streamlined Fundraising Path for Crypto Projects
Metanomia View
Rather than binding a token to the same regulatory treatment from beginning to end, this proposal is an attempt to reassess the scope of regulation according to how much of what the development team promised has been completed. If adopted, the issuer would first judge whether the conditions for terminating the investment contract have been met, and the SEC would supervise that judgment. Chairman Atkins' emphasis that congressional legislation is also needed can be read as reflecting the difficulty of guaranteeing long-term institutional stability through administrative rules alone. In the final version, the key question is whether investors can adequately verify their risk of loss and whether the promises have been carried out.