US Securities and Exchange Commission (SEC) Chair Paul Atkins has proposed a comprehensive "safe harbor" framework designed to provide regulatory carveouts for cryptocurrency companies and certain tokens. Speaking at the DC Blockchain Summit in Washington, D.C., Atkins outlined a three-part proposal aimed at giving crypto innovators clearer pathways to operate and raise capital within the United States while maintaining investor protections.
The proposed framework consists of three key exemptions: a "startup exemption" to allow early-stage projects a defined period and capital limit to develop before facing full securities registration; a "fundraising exemption" permitting investment contracts involving crypto to raise up to $75 million within a 12-month period without registering under securities laws; and an "investment contract safe harbor" to provide certainty about when a crypto asset transitions from being a security to a non-security, specifically once an issuer has "permanently ceased all essential managerial efforts" as promised.
Atkins emphasized the urgency of the matter, stating, "It is past time for us to stop diagnosing the problem and start delivering the solution." He indicated that the SEC expects to release proposed rules for these exemptions for public comment in the coming weeks. However, he also noted that "only Congress can ensure that regulation in this area is future-proofed through comprehensive market structure legislation," referencing a currently stalled bill in the Senate.
This announcement coincided with a joint interpretation issued by the SEC and the Commodity Futures Trading Commission (CFTC), which clarified that most crypto assets are not securities themselves, with Atkins specifying that "only one crypto asset class remains subject to the securities laws," identifying it as tokenized traditional securities. The SEC is also seeking public feedback on proposed changes to Rule 15c2-11, which would limit broker-dealer reporting requirements to equity securities, thereby easing potential burdens on crypto assets.
