SEC Crypto Rule Proposal Faces Oct. 20 Public Comment Deadline

The SEC’s public comment period for Regulation Crypto Assets closes Oct. 20, ending a 60-day window for feedback on proposed registration exemptions and a safe harbor tied to investment contracts.

Introduced in August, the proposal would let qualifying issuers offer up to $5 million over four years without Securities Act registration. A second exemption would cover up to $75 million in a 12-month period, with a $20 million Tier 1. Issuers would provide disclosures, and both tiers of the fundraising exemption would require ongoing reports; Tier 2 would face stricter financial-statement requirements.

The proposed safe harbor concerns a crypto asset associated with an investment contract. To qualify, the issuer would need to complete or permanently end the essential managerial work it promised investors, make no new promises of that work and file a transition report on Form TR with the SEC. The asset would then no longer be subject to that investment contract.

The MiCA Crypto Alliance supported the disclosure approach but sought clearer treatment of asset rights, audit details and distinctions among issuers. SkyBridge Capital also supported the proposal. Other comments have raised questions about buybacks and the meaning of “central party”.

The CLARITY Act, a separate effort to establish a U.S. digital asset framework, has not been enacted. Public comments on the SEC proposal are due Oct. 20; its exemptions and safe harbor have not taken effect.