Crypto and Tokenized Stocks: The SEC's Major Shift Becomes Clearer
The SEC is trading lawsuits for written rules. The American regulator will meet publicly on Friday, August 14, to examine a tailored regime for certain fundraising related to crypto assets. If it is submitted for consultation, this text will constitute the agency's first true regulatory procedure dedicated to the crypto sector. A second initiative could advance on the same day. According to Bloomberg, the SEC is preparing an innovation exemption that could allow for the continuous trading of tokenized stocks. However, caution is warranted: unlike the issuance regime, this provision is not on the official agenda, and its publication on Friday remains uncertain.
Key Points
- The SEC is examining a proposed rule on Friday that would allow crypto projects to raise funds without registering their tokens as securities.
- Paul Atkins advocates for an exemption that could last up to four years to provide developers with a regulatory runway.
- The exit from securities law would only apply once essential management efforts are completed or definitively abandoned by the founders.
- With the Senate not voting on the Clarity Act before the August recess, the SEC is taking the lead with a more durable rule than its simple communications.
Raising Funds Without Full Registration
The SEC's official notice announces a vote on the publication of new rules for certain investment contracts involving crypto assets. The commissioners will not yet vote on a final regulation, but there is a potential opening for public consultation.
The framework, dubbed Regulation Crypto Assets, relies on exemptions rather than enforcement through sanctions. Its chairman, Paul Atkins, presented three components in March.
The first exemption could allow young projects to raise up to $5 million over a maximum period of four years, with simplified information comparable to that of a white paper. A second would permit raises of up to $75 million over twelve months, in exchange for more comprehensive financial information. However, these amounts were presented as examples and may still evolve.
Finally, an exit clause would specify when securities law ceases to apply. This could occur when the founders have completed or definitively abandoned the essential management efforts promised to investors. Thus, the project would not automatically exit the SEC's jurisdiction solely because it claims to be decentralized.
This procedure comes after the Senate left for recess without voting on the Clarity Act. Unlike the SEC's recent communications on staking, airdrops, or mining, a final regulation would be more difficult to overturn with a change in direction.
Tokenized Stocks Could Operate 24/7
In parallel, the SEC is preparing a separate exemption for tokenized securities. According to Bloomberg, reported by several media outlets, this innovation exemption could be unveiled as early as Friday, but its details remain subject to change.
The provision would notably allow certain platforms to offer digital representations of stocks on the blockchain, with potentially continuous trading. However, listed companies could obtain the right to oppose the tokenization of their securities by third parties, a direct response to controversies caused by tokens replicating stocks without the issuer's consent.
Stronger anti-money laundering requirements are also being considered. The affected platforms may need to be incorporated in the United States, which would bring some offshore arrangements under U.S. jurisdiction.
Wall Street, however, demands safeguards. SIFMA, which represents banks and brokers, believes that a security remains subject to the same obligations, whether it circulates in a traditional register or on a blockchain. It therefore calls for a complete regulatory process rather than a quickly granted exemption.
Friday will not mark the immediate implementation of these measures. The issuance regime will still need to go through a consultation and then a final vote, likely after several months. But the direction is clear: in the absence of a law passed by Congress, the SEC is beginning to build the regulatory framework for tokenized finance itself.
-- Price
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