SEC proposes $75M crypto offering exemption—and a path out of securities rules

The US Securities and Exchange Commission has proposed new fundraising rules for crypto projects. One option would allow eligible issuers to raise up to $75 million without completing a full SEC registration.

The proposal goes beyond fundraising. It sets out how a token could eventually be separated from the securities offering used to finance its development.

Crypto projects could raise up to $75M

Proposed Regulation Crypto Assets contains three routes for projects at different stages.

A startup could raise up to $5 million over four years through a one-time exemption, but it would need to disclose details about the project and its leadership, although financial statements would not be required.

Two larger routes would cover offerings of up to $20 million and $75 million within 12 months, and the disclosure burden would increase with the amount raised. A project that wants the $75 million exemption, for example, would need audited financial statements.

Public advertising and sales would be allowed under the proposal, but there will be limits on how much some retail investors will be allowed to invest.

SEC Chairman Paul Atkins said that the aim of the rules are to give crypto businesses clearer fundraising options under US securities law.

When could a token leave securities oversight?

The SEC also spoke about what happens after developers finish the work financed by an offering.

A project could file a notice stating that it had completed the essential commitments made to investors, but this is provided the required conditions were met. Once these conditions are met, the SEC says other transactions involving the token could be treated separately from the original securities offering.

For qualifying projects, that would provide a route beyond federal securities oversight.

But the risk is that filing the notice could amount to an acknowledgement that the token had previously been linked to a securities offering. The SEC could also challenge a filing if the project had not completed the promised work or failed another condition.

The proposal would restrict some state-level registration requirements, as state authorities would retain their powers to pursue fraud and other misconduct.

A 60-day public comment period will begin after the proposal appears in the Federal Register, and none of the rules is final yet.

Final Summary

• Eligible crypto projects could raise up to $75 million without completing full SEC registration.
• A qualifying token could later be separated from the securities offering that funded its development.