SEC Proposes New Crypto Rules With a $75 Million Offering Path

The SEC proposed specialized exemptions for certain crypto investment contracts, including a pathway for offerings reaching $75 million annually. The plan also introduces a conditional safe harbor and federal disclosure requirements.

SEC Chairman Paul S. Atkins described the safe harbor as a continuation of the agency’s March interpretation and an element of its domestic capital strategy:

“In line with the Commission’s earlier interpretative guidance, this proposal would also allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract.”

Both exemptions would require issuers to provide investors with principles-based narrative disclosures, while the fundraising route would add public offering materials, financial-condition information, and ongoing reports. Tier 2 issuers would also need audited financial statements, and every issuer relying on either exemption would remain subject to federal antifraud and antimanipulation provisions.

Neither offering route would be exclusive, allowing eligible issuers to use other Securities Act exemptions when available. The startup route would require public filings at the beginning and end of a period lasting up to four years, while its temporary relief would cover the interval in which managers work toward completing their promised essential efforts.

State preemption would also cover certain secondary transactions involving covered investment contracts initially sold under the proposal or another federal exemption. That treatment would continue only while the issuer met applicable filing, information, or periodic reporting duties. Senate Democrats previously questioned comparable crypto exemptions, arguing that reduced oversight could weaken protections for retail investors in secondary markets.