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securities regulator proposes crypto fundraising rules: What changes nowUS securities regulator proposes crypto
fundraising rules: What changes nowThe proposed rule seeks to create routes for eligible crypto issuers to raise capital
and clarify when an investment contract linked to a non-security crypto asset ceases to existUS SEC proposes new crypto
framework (Representative image from file)Akshita Singh New Delhi 4 min read Last Updated : Aug 19 2026 | 12:34 PM
ISTListen to This Article The US Securities and Exchange Commission (SEC) on Tuesday proposed a new framework for crypto
assets, with exemptions focused at making it easier for eligible issuers to raise capital. The proposal includes
separate limits for startups and larger fundraising rounds, along with a ‘safe harbour’ for certain crypto assets
linked to investment contracts. The proposal, called Regulation Crypto Assets, is part of SEC Chairman Paul Atkins’
push for a “fit-for-purpose framework” for the crypto asset market. The SEC said existing securities rules were not
designed for the asset class. What has the SEC proposed? The proposed framework includes different set of exemptions.
The first is a “startup exemption”, which would allow offerings of up to $5 million over four years. The
second is a “fundraising exemption”, which would allow offerings of up to $75 million each year.Also Read Jharkhand
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surface products mean for IndiaIRCTC cracks down on unauthorised food and water sales on trains Both exemptions would
have disclosure requirements tailored to crypto assets. The fundraising exemption would also require disclosures on the
issuer’s financial condition, including audited financial statements at certain capital-raising thresholds, according
to the SEC. The SEC said the exemptions are intended for non-security crypto assets that are subject to an investment
contract. The proposal also includes conditions focused on preserving investor protections. Why is the safe harbour
important? The proposal also includes an “investment contract safe harbor”. Under the proposed mechanism, an
issuer could certify to the SEC that it had stopped or ended all essential managerial efforts it had promised to
undertake under the investment contract. If other conditions are met, the SEC would no longer treat the non-security
crypto asset as being subject to that investment contract and, consequently, would no longer exercise authority over it.
The proposal is intended to provide greater clarity to issuers, investors and other market participants on when the
investment contract associated with a crypto asset ceases to exist. Why does the SEC say the rules are needed? The SEC
said issuers of non-security crypto assets subject to investment contracts have had to comply with existing securities
rules that were not designed for such assets. Atkins described this as a “square peg in a round hole” approach,
adding it had created complications and impeded capital formation and innovation in crypto markets. He also said the
approach had driven investment offshore. The new proposal would instead create what the SEC calls a
“fit-for-purpose framework” for these crypto assets. Atkins said the SEC was seeking “minimum effective dose,
maximum freedom to build, and durable clarity under existing law”, while keeping investor protection central. ALSO
READ: US crypto Bill exposes India's virtual digital asset regulatory gap How is this different from the US crypto
Bill? The SEC proposal comes as the US is also working on broader crypto legislation. The Digital Asset Market
Clarity Act, which seeks to establish a wider regulatory framework for digital commodities and define the respective
roles of the SEC and Commodity Futures Trading Commission (CFTC), also covers digital-asset intermediaries and the
classification and treatment of different types of digital assets. The new SEC proposal is narrower. It deals
specifically with exemptions for certain crypto offerings and a safe harbour linked to investment contracts. Atkins
also said legislation remains necessary and that the SEC would continue to support Congress in passing the CLARITY Act.
India on crypto regulations India continues to examine a broader regulatory framework for virtual digital assets (VDAs).
India currently taxes VDAs and has brought crypto-related entities under anti-money laundering rules. However, there
is no comprehensive statutory framework governing their issuance, trading, market intermediaries and investor
protection. A parliamentary panel has recommended that the government examine an appropriate statutory and regulatory
framework for VDAs. Pending such legislation, it suggested an interim mechanism involving recognised self-regulatory
organisations under the oversight of a designated regulator. The SEC proposal therefore adds another element to the
US regulatory approach: defined routes for eligible crypto issuers to raise capital and a proposed mechanism for
determining when an investment contract linked to a non-security crypto asset ceases to exist. The proposal is not a
final rule. It is part of the SEC’s ongoing effort to develop crypto-specific rules while Congress considers broader
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with Iran after missile launch: Key developmentsTopics : US SEC US securities cryptocurrencies crypto trading
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