SEC Proposes New Crypto Rules as CLARITY Act Stalls in Congress

The Securities and Exchange Commission has proposed new rules for the crypto industry after Congress failed to pass a market structure bill before its August recess. In a Tuesday notice, the SEC said the proposal aims to create a clear, fit-for-purpose framework for certain investment contracts involving crypto assets, allowing companies to raise capital while maintaining investor protections.

No Innovation Exemption Included

Notably absent from the proposal was an expected “innovation exemption” for crypto-based stocks. The rules arrived just days after the Senate failed to advance the CLARITY Act, a bill meant to clarify which federal agencies oversee crypto regulation.

What the Proposed Rules Include

Crypto companies would gain exemptions to issue up to $5 million in tokens over four years, or up to $75 million within 12 months, along with a safe harbor preventing cryptocurrencies from being classified as investment contracts. Token issuers would still need to file financial statements and meet ongoing reporting requirements. The public will have 60 days to comment once the proposal is published in the Federal Register.

SEC Chair Says Legislation Still Needed

SEC Chair Paul Atkins said legislation remains essential for creating durable rules that can’t be undone by future regulators, adding that the agency will continue supporting Congress in passing the CLARITY Act. Atkins canceled a scheduled Wyoming Blockchain Symposium appearance amid the announcement, where White House crypto adviser Patrick Witt said regulators would act more aggressively if Congress stalls.

Senate Majority Leader John Thune has scheduled a procedural vote for mid-September, but senators face limited session days before the November election, leaving the bill’s future uncertain.