US Securities and Exchange Commission Chair Paul Atkins has proposed a “safe harbor” framework aimed at easing regulatory pressure on crypto firms while keeping them within the federal oversight structure.
Summary
- SEC Chair Paul Atkins proposes safe harbor exemptions to allow crypto firms to raise capital under defined regulatory pathways.
- Framework includes startup and fundraising exemptions, along with conditions for when tokens may fall outside securities laws.
Speaking at the DC Blockchain Summit in Washington, Atkins said, “such a safe harbor would provide crypto innovators bespoke pathways to raise capital in the US, while providing appropriate investor protections.”
Calls for similar safe harbor measures have previously been put forward by SEC commissioner Hester Peirce, who has long advocated for a tailored approach that gives crypto projects time to develop before being subject to full securities regulation.
Atkins proposed a “fit-for-purpose startup exemption” targeting early-stage projects, which would allow developers to raise limited capital without full securities registration before they are subject to standard compliance requirements.
He said the provision would give projects a “regulatory runway” to develop their networks before facing the full weight of compliance requirements.
To qualify, firms would need to provide “principles-based disclosures” through public channels, a model that aligns with the industry’s practice of publishing white papers and technical updates.
His proposal also outlines a “fundraising exemption” for more established projects.
This way, issuers would be able to raise up to $75 million within a 12-month period, while meeting more structured disclosure requirements, including financial documentation.
Further, Atkins introduced an “investment contract safe harbor,” aimed at addressing when a token should no longer be treated as a security.
“This safe harbor could apply once the issuer has completed or otherwise permanently ceased all essential managerial efforts that the issuer represented or promised that it would engage in under the investment contract,” Atkins said.
The provision looks to bring more certainty to how tokens are assessed as projects move toward decentralised structures.
According to Atkins, the SEC will soon put forward draft rules for public consultation, though he added that “only Congress can ensure that regulation in this area is future-proofed through comprehensive market structure legislation.”
The SEC chair’s comments came as the SEC and the Commodity Futures Trading Commission issued a joint interpretation outlining how crypto assets should be classified under federal law.
Atkins has clarified that “only one crypto asset class remains subject to the securities laws,” identifying it as “traditional securities that are tokenized.”
As covered by crypto.news, the SEC is also seeking public feedback on proposed changes to Rule 15c2-11, which would limit broker-dealer reporting requirements in over-the-counter markets to equity securities, easing concerns that the rule could extend to crypto assets.
