SEC Revolution: New Regulation Crypto Assets proposed for issuing tokens

The day before, the US Securities and Exchange Commission (SEC) took a historic step towards the crypto industry. The head of the department, Paul Atkins, presented a draft of a new regulatory framework called Regulation Crypto Assets (Reg CA). This document is intended to replace the long-standing practice of putting pressure on startups through lawsuits and create transparent rules for raising capital. The initiative has already caused optimism among American developers, who until now were forced to take their business offshore.

What does the new Regulation Crypto Assets offer?

The new draft rules categorize crypto investment contracts and create special exceptions for them from the requirements of the Securities Act of 1933. The main parameters of the initiative are as follows:

• Exception for startups:Small companies will be able to raise up to $5 million over four years without going through a complex registration procedure.
• Large-scale crowdfunding:Large projects will have the opportunity to raise up to $75 million every 12 months. Once certain thresholds are met, issuers will only be required to provide basic disclosures and audited financial statements.
• Safe Harbor: Issuers are released from the “investment contract” status once the founders cease active management of the project or cease fulfilling their promises to investors.

How will the lives of startups and investors change?

The main advantage of the proposed reform is federal preemption over individual state rules. Projects will no longer have to adapt to the strict requirements of local laws. At the same time, the SEC will maintain mechanisms to protect investors from outright fraud. Public discussions of the initiative will last 60 days, after which the new rules can officially come into force.