The U.S. Securities and Exchange Commission (SEC) has released proposed rules for "Regulation Crypto Assets," aiming to establish two types of registration exemptions and conditional safe harbors for investment contracts involving crypto assets; the rules are not yet in effect and are entering a public comment period.

The startup exemption allows issuers to raise up to $5 million in a one-time offering within four years, requiring the submission of principle-based disclosure documents before and after issuance, detailing the project, team, technology, token mechanics, risks, and key management tasks to be completed; this path does not require audited financial statements.

The financing exemption allows eligible issuers to raise up to $75 million every 12 months, but they must provide financial statements and bear ongoing reporting obligations; both types of exemptions are subject to federal securities laws' anti-fraud and anti-market manipulation provisions and do not constitute a comprehensive exemption for token issuance.

The rules also propose a safe harbor for investment contracts: if issuers complete or permanently cease their previously committed "key management tasks," and meet conditions while submitting proof to the SEC, the related crypto assets may decouple from the original investment contract and no longer fall under the securities regulatory framework due to that contract.

The SEC adopts a "principle-based" disclosure approach rather than rigid uniform forms, intending to allow different token projects to disclose key facts according to their own structures; however, issuers must still clarify what tasks investors rely on the team to complete, how the tokens operate, how the raised funds will be used, and the substantive risks faced by the project.

In market mechanisms, early protocol teams will become direct buyers under the $5 million exemption, with financing funds flowing from retail and accredited investors to token network development; large-scale projects may shift to the $75 million annual channel and exchange ongoing disclosures for higher fundraising limits. The safe harbor reduces legal uncertainty regarding whether tokens remain securities after project completion, benefiting compliance, auditing, token disclosure, and issuance infrastructure; projects relying on regulatory ambiguity or lacking verifiable development commitments will face pressure.

Source: Public Information