SEC to unveil 'Regulation Crypto' with startup exemptions

The SEC will propose "Regulation Crypto" in July, offering exemptions and safe harbors for crypto startups, DeFi, and tokenized securities, with clear fundraising limits and reduced compliance requirements.

The U.S. Securities and Exchange Commission (SEC) is preparing to introduce a major crypto regulation proposal, known as "Regulation Crypto," as early as July. This initiative aims to ease compliance requirements for crypto startups by offering temporary exemptions from registration for developers launching crypto investment contracts. The proposal sets specific fundraising limits—up to $5 million for early-stage startups and $75 million annually for more advanced projects. It also establishes a legal safe harbor for issuers who reduce direct managerial involvement over crypto assets. Additionally, the rule would provide broad exemptions and safe harbors for decentralized finance (DeFi) activities and tokenized securities, ensuring certain on-chain activities do not trigger enforcement actions. The proposal will undergo a public comment period and is seen as a significant step toward clarifying U.S. digital asset regulations, especially as Congress’s Clarity Act remains uncertain.