California regulator and six blockchain groups file objections to SEC crypto offering proposal; SEC keeps taking comments

California’s Department of Financial Protection and Innovation (DFPI) has told the US Securities and Exchange Commission that its proposed “Regulation Crypto Assets” would prevent states from protecting investors, Bloomberg Law reported on Wednesday 21 October.

The proposal, issued in August, would exempt certain crypto token offerings from SEC registration. In a comment letter shared with Bloomberg Law, California officials said the plan would preempt state securities registration laws and deprive investors of protections against abusive or fraudulent offerings.

Separately, six blockchain organisations, Chainlink Labs, the Cardano Foundation, Hedera, Aptos Labs, Ava Labs and the Stellar Development Foundation, asked the SEC in a joint letter dated 20 October to write its classification of “digital commodities” as non-securities directly into the rule, Cointelegraph reported. The groups said interpretive guidance alone leaves market participants facing legal uncertainty, and asked for clearer treatment of secondary-market trading and staking.

Cointelegraph reported that the proposal drew about 140 public comments during its 60-day comment period. An SEC spokesperson said the commission would continue to accept comments after the stated deadline, TokenPost reported.

The SEC has not adopted the rule and has not said when it will decide on a final version.

For the proposal’s main terms, see our earlier report.