SEC proposes formal crypto rulemaking via Regulation Crypto

The Securities and Exchange Commission (SEC) has scheduled an open meeting for August 14 to vote on ‘Regulation Crypto’, a 400-page proposal aimed at establishing a formal rulemaking framework for digital assets. This move represents the agency’s first attempt at formal rulemaking for crypto assets rather than relying on enforcement actions.

The proposal introduces three primary exemption pathways: a startup exemption for raising approximately $5 million via whitepaper disclosures, a fundraising exemption for raises up to $75 million involving audited financials, and an investment contract safe harbor. This safe harbor would allow tokens to exit securities classification once their networks achieve sufficient decentralization.

This regulatory push follows delays in the congressional Digital Asset Market CLARITY Act. SEC Chair Paul Atkins indicated the agency is prepared to enact these rules without new congressional legislation. The initiative is seen by market experts as a way to provide regulatory certainty and resolve legal confusion caused by applying traditional securities tests to evolving blockchain networks.