The U.S. Securities and Exchange Commission on Tuesday proposed a new regulatory framework for crypto assets, the first major step under U.S. President Donald Trump's administration to give the industry the tailored rules it has long pushed for.
The SEC's proposal would exempt certain crypto companies and offerings from U.S. securities rules, which should make it easier for crypto companies to issue tokens and raise money.
The agency "seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws," Paul Atkins, the SEC's Trump-appointed chair, said in a statement.
Trump, who courted crypto cash on the campaign trail and whose family has profited from its own crypto endeavors, has prioritized reform for the sector in his second administration.
Under his Republican leaders, the SEC ended a crackdown on the crypto industry, moving swiftly last year to rescind stringent crypto accounting guidance and dismiss lawsuits against Coinbase (COIN.O), Binance and others that the agency had alleged were flouting its rules.
Crypto companies have long argued that crypto tokens more closely resemble commodities than securities, and should, for the most part, not be subject to the SEC's rules. Atkins has backed that position.
If finalized as drafted, the SEC's proposal would allow a one-time exemption for crypto companies to issue up to $5 million in crypto tokens during a four-year period. It would also allow offerings of up to $75 million during each 12-month period, though issuers would still have to provide financial statements and meet regular reporting requirements.
Under both exemptions, token issuers would still need to disclose certain information to investors.
The SEC's proposal also includes a safe harbor that would exclude a crypto asset from being deemed an investment contract, if certain conditions are met.
"Regulation Crypto Assets is an important step toward the clear, fit-for-purpose rules digital asset markets in the United States have needed for years," said Summer Mersinger, CEO of the Blockchain Association, in a statement.
Cody Carbone, CEO of industry trade group The Digital Chamber, also praised the proposal and said in a statement that his group would "work with the SEC to ensure consumers and the digital assets industry can thrive onshore in the U.S."
CHANGE OF TONE
Deep-pocketed crypto companies have spent hundreds of millions of dollars over several years campaigning for legislation they say will put them on solid legal ground. But with that effort now stalled in the Senate, the SEC is stepping in.
The SEC's proposal could help put the crypto industry on a more solid legal footing in the short term. But Reuters reported on Tuesday that many industry executives worry that without legislation future administrations may seek to overturn or toughen up the SEC's rules.
The SEC's plan is subject to public comment for 60 days after it is published in the U.S. Federal Register, the SEC said.
