Public comment period closes on SEC's proposed 'Regulation Crypto Assets' token offering rules

The public comment period on the US Securities and Exchange Commission’s proposed “Regulation Crypto Assets” closed on Tuesday 20 October, US time, according to the SEC’s rulemaking page.

The SEC issued the proposal on 18 August. It would create two exemptions from registration under the Securities Act of 1933 for certain investment contracts involving crypto assets: one permitting offerings of up to US$5 million over four years, and a second permitting offerings of up to US$75 million in each 12-month period, the SEC said. Issuers would provide principles-based disclosures and remain subject to anti-fraud and anti-manipulation provisions.

The proposal also includes a conditional safe harbour from the term “investment contract” in the legal definition of a security, according to the SEC. The rule is a proposal and has not been adopted.

Comments filed by the deadline include letters from blockchain analytics firm Chainalysis and crypto media and data company Blockworks, according to the SEC’s comment file and Crypto Briefing. Crypto Briefing reported that Blockworks asked the SEC to allow disclosures to be published on-chain by approved third-party filing agents, and to require projects to disclose market-maker agreements, liquidity arrangements, token loans and payments to promoters.

The SEC has not said when it will decide on a final rule.