The U.S. Securities and Exchange Commission (SEC) has proposed new regulations to ease funding requirements for virtual asset projects. This move is seen as significant, as it establishes a direct regulatory framework while Congress has yet to pass the Virtual Asset Market Structure Act (Clarity Act).
On Tuseday, CoinDesk reported that the SEC unveiled Regulation Crypto Assets, which would exempt certain virtual asset investment contracts from registration requirements under securities law.
The proposed regulation introduces two exemption methods. For smaller projects, a simplified funding process would allow raising up to 5 million USD over four years. These projects must submit public disclosure statements during the funding period and provide investors with necessary information.
Larger projects face stricter disclosure requirements but can be exempt from registration obligations for up to 75 million USD annually. They must publicly submit funding materials, disclose financial status, and report to the SEC.
SEC Commissioner Paul Atkins stated that they’re paving the way for the virtual asset industry to flourish in the U.S. in the coming years through these exemption measures.
The proposal also includes a Safe Harbor provision to ensure that virtual assets meeting specific criteria are not classified as investment contracts under securities law.
Commissioner Atkins explained that this provision could apply if the issuer has either completed all core management activities promised in the investment contract or permanently ceased those activities.
The regulation is currently in the proposal stage and not yet finalized. The SEC plans to gather input from industry stakeholders and experts over a 60-day period.
This announcement comes as the U.S. Senate prepares to consider the Clarity Act during a three-week session next month. If this window closes, Congress will enter an extended recess.
Commissioner Atkins emphasized that while discussions on the Clarity Act are ongoing, legislation remains crucial for authorities to establish sustainable rules for the future of the crypto industry.