The U.S. Securities and Exchange Commission (SEC) has introduced a set of new regulations aimed at the cryptocurrency market. The proposal, titled Regulation Crypto Assets, seeks to facilitate capital raising through tokens while establishing a "safe harbor" for certain digital assets.
Key Details
This regulatory initiative includes two exemptions from the typical registration requirements mandated by the Securities Act of 1933.
The first exemption allows crypto companies to raise up to $5 million over a four-year period, while the second permits up to $75 million within any 12-month timeframe.
In both scenarios, issuers are required to disclose relevant information to investors. Moreover, offerings under the second exemption will necessitate financial disclosures and regular updates to the SEC.
Additionally, the SEC has proposed a "safe harbor" for investment contracts, which would allow certain crypto assets to be exempt from securities regulations if specific conditions are met.
A public comment period of 60 days will commence following the publication of the proposal in the Federal Register.
SEC Chair Gary Gensler emphasized that these new rules do not replace existing laws enacted by Congress. He noted that a solid legislative framework would provide the market with more stable regulations that would be harder to amend under future commission leadership.
This initiative coincides with Congress's ongoing work on the CLARITY Act, which aims to clarify the jurisdictional boundaries between the SEC and the Commodity Futures Trading Commission (CFTC) in the realm of digital assets.
On August 8, Senate Majority Leader John Thune initiated the process for the Senate to consider the legislation, with a vote scheduled for September 15 after the senators return from their August recess.
Significance of the CLARITY Act Vote
Stuart Alderoty, Chief Legal Officer at Ripple and President of the National Crypto Association, discussed the September 15 vote in an interview with The Block, labeling it a critical test for the CLARITY Act.
A total of 60 votes will be necessary for the bill to advance.
"September 15 will be a litmus test for whether the bill continues to progress through Congress," Alderoty stated.
He believes the bill still has a chance to pass the Senate. However, even if it fails, the SEC and CFTC will continue to develop their own regulations independently. He noted that the two regulators have already begun to coordinate more closely on cryptocurrency issues.
Despite this, Alderoty considers the CLARITY Act to be the more favorable option. Rules from both agencies can be revised with changes in leadership, whereas repealing federal law is significantly more challenging. He added that if the bill is passed, regulators will still need to issue additional rules.
Alderoty also connected the legislation to the competitiveness of the U.S. economy, warning that delays could lead businesses to relocate jobs and investments overseas. According to the National Crypto Association, the cryptocurrency industry generates approximately 232,000 jobs and $55 billion in economic activity in the country.
Optimism from the White House
Patrick Witt, the White House's chief cryptocurrency advisor, expressed hope for the continued advancement of the CLARITY Act following the Senate's return.
Before the vote, the administration plans to negotiate with Democrats regarding contentious aspects of the bill.
"We will sit down with Democrats and try to resolve the disagreements," he stated.
One of the contentious topics has been rewards for stablecoin holders. Previously, Senators Angela Olsson and Thom Tillis proposed a compromise that would prohibit platforms from paying users solely for holding "stable coins" while allowing rewards for transactions and other activities.
On August 18, Senate Banking Committee Chair Tim Scott noted that discussions on this issue have resumed, despite lawmakers previously considering it nearly resolved.
Another point of contention involves the cryptocurrency interests of President Donald Trump and his family.
Democrats are advocating for additional ethical restrictions, including a proposed rule that would prevent government officials, employees, and their spouses from issuing or promoting their own digital assets, although ownership and investments in cryptocurrencies would not be prohibited.
A separate proposal by Senators Ruben Gallego and Thom Tillis would empower state attorneys general to enforce these restrictions.
Senator Cynthia Lummis stated that she is still unsure whether Trump will support this version.
Solana Policy Institute Estimates 10% Chance for Bill's Passage
Miller Whitehouse-Levine, head of the Solana Policy Institute, estimated the likelihood of the CLARITY Act being passed before the midterm elections in November at around 10%.
"Right now, I would say it is in purgatory during the August recess," he remarked.
According to Whitehouse-Levine, the Senate has been working on the bill for over a year, and time is running short before the end of the current session. He added that the upcoming vote on September 15 is only one step in the process, with several more hurdles to clear afterward.
His estimate falls short of prediction markets, where participants on Polymarket assessed the chances of the CLARITY Act being enacted by the end of the year at 20%, while Kalshi pegged it at 33%.
Source: Polymarket. Source: Kalshi.Whitehouse-Levine attributed his lowered expectations not only to time constraints but also to the increasing number of stakeholders with their own interests joining the negotiations.
He urged federal regulators not to wait for Congress but to create their own regulatory frameworks. Among the priorities he mentioned were rules for token issuance and conditions for trading tokenized securities and derivatives in the U.S.
It is worth noting that in August, the U.S. Treasury proposed rules for stablecoins under the GENIUS Act.