The SEC has excluded stablecoins from securities and proposed new regulations to clarify capital raising for crypto assets.
The U.S. Securities and Exchange Commission (SEC) has unveiled significant changes to its regulatory framework for cryptocurrencies, including the exclusion of stablecoins from the definition of securities. This announcement was made by SEC Chairman Paul Atkins during the DC Blockchain Summit.
Atkins introduced a new token taxonomy aimed at reducing regulatory ambiguity. Under the updated guidelines, four asset categories will not be classified as securities:
- digital goods
- digital collectibles
- digital instruments
- payment stablecoins, as defined by the GENIUS Act
He clarified that the only assets considered securities are "digital securities," which pertain specifically to tokenized traditional financial instruments.
New Regulatory Framework for Crypto Assets
Atkins also announced a forthcoming set of rules known as Regulation Crypto Assets, designed to establish clear legal pathways for capital raising in the cryptocurrency sector. This proposal will be reviewed by the SEC in the coming weeks and includes three main provisions:
- Startup Exemption: A temporary allowance for early-stage projects to raise up to $5 million over four years with basic disclosures.
- Fundraising Exemption: This would permit annual fundraising of up to $75 million, requiring issuers to disclose their financial situation.
- "Safe Harbor" for Investment Contracts: Once an issuer meets initial obligations and decentralizes control, the asset will no longer be deemed an investment contract.
The SEC aims to enhance trust in U.S. innovations while collaborating with the Commodity Futures Trading Commission (CFTC) on these standards.
Impact on Industry Players
In light of these regulatory changes, Tally, a management platform for decentralized autonomous organizations (DAOs), announced its closure after six years of operation, serving over 500 organizations, including Uniswap and Arbitrum. Tally CEO Dennison Bertram attributed the shutdown to shifts in regulatory policies that had previously pressured projects towards decentralization to avoid securities classification.
"The administration is signaling: 'You have no problems, do what you want.' This provides immense freedom, but now it's unclear if decentralization is even necessary," Bertram remarked.
Bertram's comments reflect a broader sentiment in the market, with other industry leaders suggesting a retreat from decentralized governance structures. The closure of Tally also highlights a consolidation trend within the blockchain space, as the anticipated proliferation of Layer 2 networks did not materialize as expected.
Earlier this year, the SEC reaffirmed that tokenized securities fall under federal regulations applicable to traditional financial instruments, underscoring the evolving landscape of cryptocurrency regulation.
