SEC Puts First Crypto Rule on the Table With Regulation Crypto

The SEC wants to regulate crypto securities through two exemption paths, with reporting requirements for issuances up to $75 million. The proposal marks a shift from enforcement to a fixed U.S. framework.

Key Takeaways

• The SEC has proposed Regulation Crypto, its first major permanent crypto rule for digital assets.
• The proposal offers two exemption paths for crypto securities: up to $5 million one time and up to $75 million per year.
• The SEC is now asking for comments; a final version will only come after further review.

The U.S. Securities and Exchange Commission has proposed a major crypto rule for the first time. With Regulation Crypto, the regulator wants to create a path for issuing crypto securities without immediately applying all of the existing stricter rules.

First Fixed Crypto Rule

The move stands out because the SEC is, for the first time, focusing on permanent rulemaking for digital assets. That fits a broader shift from mainly enforcement toward more proactive regulation, even though Congress still has not passed a market structure bill for crypto. The new direction also lines up with the regulator's earlier move to sketch out a specific framework for digital assets through Regulation Crypto.

The timing was also unexpected. The regulator had canceled a meeting on August 14 that was meant to vote on the same proposal, citing an unexpected scheduling issue.

Two Paths for Issuances

The proposal includes two exemption paths for crypto securities. The first applies to a one-time issuance of up to $5 million (€4.3 million) within a four-year period. The second path covers issuances of up to $75 million (€64.8 million) per year.

According to the SEC, issuers under both exemptions must provide investors with basic, narrative information. Under the second path, that also includes financial statements and ongoing reporting requirements. The regulator also wants certain crypto assets to no longer automatically be treated as investment contracts under securities law.

SEC Chair Paul Atkins said the proposal could also offer a safe harbor once an issuer has completed or permanently stopped all essential management tasks that were promised under an investment contract.

Why This Matters

For European crypto followers, this is mainly relevant because the U.S. is now moving concretely toward its own rule framework instead of only taking action through isolated enforcement. That could affect how international crypto companies structure their offerings, especially if the SEC eventually adopts a final version of the rule.

The commission is now asking the market and the public for comment letters. After that, it usually takes months of review before a final version is worked out. Atkins also stressed that, in his view, legislation is still essential to create rules that cannot later be rolled back by a future regulator.