SEC Chair Paul Atkins speaks at an event at the White House in Washington, D.C., on July 6. [EPA]
SEC Chair Paul Atkins speaks at an event at the White House in Washington, D.C., on July 6. [EPA]

The US Securities and Exchange Commission has unveiled a tailored regulatory framework for the virtual asset industry — one the sector has long sought. The centerpiece is an exemption from securities registration requirements for crypto companies that meet certain conditions when issuing tokens to raise capital.

The move accelerates the pro-virtual-asset policy trajectory that has defined the Donald Trump administration since it took office, coming as congressional debate over legislation to govern the structure of the virtual asset market has stalled.

The SEC on Tuesday proposed "Regulation Crypto Assets," a framework that would apply a separate securities-issuance regime to certain investment contracts involving virtual assets.

Virtual asset companies have long faced regulatory uncertainty over whether securities laws apply when they raise funds through token issuances — and, if so, what registration procedures they must follow.

If the proposal is finalized, crypto companies would gain access to distinct registration-exemption pathways depending on the scale and method of their fundraising.

The first pathway the SEC outlined is a "startup exemption." Early-stage projects that meet certain requirements could issue tokens to raise up to $5 million over a period of up to four years.

The exemption may be used once. Issuers must file relevant documents with the SEC at the start and end of the exemption period and disclose certain information to investors.

The second pathway, a "fundraising exemption," targets larger capital raises and is divided into two tiers. Tier 1 allows fundraising of up to $20 million over 12 months; Tier 2 raises that ceiling to $75 million.

Both measures waive securities registration requirements only — they do not eliminate investor protections under securities law. Issuers must still disclose certain information to investors, and securities law provisions prohibiting fraud and market manipulation continue to apply.

Another notable element of the proposal is a "safe harbor" provision that sets out when a virtual asset may be separated from its associated investment contract under securities law.

The SEC outlined criteria under which a virtual asset could be detached from its associated investment contract — provided certain conditions are met and the issuer has either completed or permanently discontinued the core operational and development activities it had promised investors.

The provision is intended to reduce regulatory uncertainty in the virtual asset market.

The proposal comes as the US Senate has been slow to advance the Digital Asset Market Clarity Act, which would establish a comprehensive regulatory framework for the crypto market.

SEC Chair Paul Atkins said in a statement that the announcement represents "the SEC's answer to a longstanding concern of innovators," adding that it provides "a clear path for crypto entrepreneurs and market participants to raise capital under federal securities laws."

Atkins also said congressional legislation would ultimately be needed to establish a stable, long-term regulatory framework.

The proposal is not a final rule that takes immediate effect. It will be published in the Federal Register and undergo a 60-day public comment period.

Crypto industry leaders are scheduled to hold a follow-up meeting at the White House on Wednesday, drawing market attention to the future direction of policy.


mokiya@heraldcorp.com