U.S. SEC nears rollout of crypto 'safe harbor'…enters White House review phase

The U.S. Securities and Exchange Commission (SEC) has placed a proposed 'safe harbor' rule—designed to allow the initial launch of virtual-asset (crypto) projects—into the White House review process, according to reports.

On the 6th (local time), The Block reported that SEC Chair Paul Atkins said at a digital-asset conference that the proposal has been submitted to the Office of Information and Regulatory Affairs (OIRA), a White House regulatory review body, and is undergoing final review. This is the last step before a rule is announced, making an official release likely in the near term.

The proposal includes a 'startup exemption' provision that would allow early-stage projects to raise funds without registration if certain requirements are met. Under the exemption, projects would be able to raise capital within a defined scope for about four years, alongside disclosure obligations aimed at protecting investors.

The SEC is also pursuing an 'investment contract safe harbor' based on token classification standards (token taxonomy). This is seen as a move to clarify the criteria for determining whether a digital asset qualifies as a security.

These regulatory steps are unfolding as the U.S. Congress continues discussions on comprehensive crypto legislation. Chair Atkins underscored the importance of legislation, saying, "Clear standards are needed that regulators can apply consistently."

Separately, the SEC is reviewing an 'innovation exemption' regime for on-chain assets. This would function as a type of regulatory sandbox, allowing new services to be tested within a limited scope.

However, market views on such exemptions are divided. Some in traditional finance warn they could weaken investor protection and market oversight, while the industry argues for a more flexible regulatory environment.

The SEC plans to release the proposal, including detailed criteria, in stages going forward.