US SEC weighs crypto 'safe harbor'…signals easing of fundraising rules

The US Securities and Exchange Commission (SEC) is considering introducing a “safe harbor” that would grant crypto firms a temporary reprieve from certain regulations.

According to Cointelegraph on the 17th (local time), SEC Chair Paul Atkins proposed at an event in Washington, DC, a plan to provide bespoke regulatory exemptions for crypto companies.

“At this point, it’s time to move beyond diagnosing the problem and present solutions,” Atkins said, adding that a safe harbor “would provide a pathway for crypto firms to raise capital in the US while maintaining investor protection.”

His proposal consists of three measures. First, a “startup exemption” would allow early-stage crypto firms to operate for a set period without regulatory burdens.

Next, a “fundraising exemption” would permit investment contracts related to crypto assets to raise funds within a certain cap without securities registration.

In addition, an “investment contract safe harbor” would establish criteria under which, if certain conditions are met, a crypto asset would no longer be deemed a security. Atkins explained that it “could apply when the issuer has fully ended the core managerial role it promised with respect to the asset.”

The SEC plans to release the proposed deregulatory measures within the coming weeks and proceed with a market consultation process.

Atkins, however, stressed that Congress’s role is essential to establishing a crypto regulatory framework. “In the long run, comprehensive market-structure legislation is needed,” he said.

In the US Congress, a market-structure bill that would define the authority and scope of crypto regulation is under discussion, but passage in the Senate has been delayed due to differences over key details.