SEC proposes new crypto asset regulations as exchanges pivot to brokerage

The U.S. Securities and Exchange Commission (SEC) has proposed ‘Regulation Crypto Assets,’ a new framework designed to provide clarity for crypto asset issuance and fundraising. The proposal introduces two primary exemptions: a one-time startup exemption allowing projects to raise up to $5 million over four years, and a larger fundraising exemption permitting qualifying issuers to raise up to $75 million every 12 months. While intended to reduce uncertainty and prevent offshore migration of capital, legal experts suggest these rules are unlikely to trigger a repeat of the 2017 initial coin offering (ICO) boom due to strict disclosure and reporting requirements.

Simultaneously, major crypto exchanges are evolving into traditional brokerages to diversify revenue. Kraken has expanded US stock trading to the European Economic Area and acquired the futures platform NinjaTrader. Coinbase has requested that the SEC and CFTC harmonize regulations for equity perpetual futures (perps), arguing that jurisdictional overlap currently blocks the ability to trade tokenized stocks and ETFs in the U.S. Coinbase seeks to have these products treated as ‘security futures’ to streamline licensing and onshore market activity.