New exemptions let crypto developers raise capital without full securities registration, a move Puerto Rico’s blockchain community is following closely
The Securities and Exchange Commission (SEC) proposed a new set of rules Tuesday aimed at easing capital-raising requirements for crypto asset developers, even as it pressed Congress to pass permanent legislation covering the same ground.
The move lands as U.S. Senate Republicans continue working to clear a path for the Digital Assets Market Clarity Act, commonly known as the Clarity Act.
The stakes reach beyond Wall Street and Washington. Puerto Rico has used a key tax incentive to build itself into one of the crypto industry’s most concentrated hubs, drawing prominent leaders and innovators from the U.S. under Chapter 2 of the Act 60 Incentives Code.
The SEC’s rulemaking and the Clarity Act’s progress could shape how easily island-based developers and investors raise capital and operate under federal law.
“Today’s proposal sits at the center of this Commission’s capital formation agenda, and it’s essential to providing a framework for crypto asset fundraising,” SEC Chairman Paul S. Atkins said about the rules, titled Regulation Crypto Assets. “It is the Commission’s answer to the question that has puzzled innovators since the birth of the blockchain: How can I raise capital to develop a crypto asset while I’m still working to develop the network where it will be used?”
Two new paths to raise capital
The 400-page proposal covers the full scope of implications for investors and crypto developers, but its main goal is to create two exemptions to the registration requirements of the Securities Act of 1933, which governs, among other things, what financial disclosures must be provided for investment contracts.
The first exemption would allow crypto developers to raise up to $5 million from investors over a four-year period, while the second would allow offerings of up to $75 million during any 12-month period.
The goal, Atkins argued, is to create a fit-for-purpose framework that lets developers raise capital while giving investors safe harbor, since developers would still be required to provide financial information.
Next steps and a push for permanent law
The announcement is only the first step toward the rules becoming final. The Commission must now hold a 60-day public comment period, then review the feedback — a process that could be shortened but is unlikely to conclude before the midterms.
Republicans, meanwhile, continue pushing for a vote on the Clarity Act before the midterms. Senate Majority Leader John Thune has filed a motion for cloture on the bill, teeing up a vote for Sept. 15 on whether it can clear the 60-vote threshold needed to overcome a filibuster. During the SEC announcement, Atkins insisted that passing the Clarity Act remains essential, warning that without crypto-friendly federal legislation, the industry’s brain drain to other countries will continue.
“For too long, issuers and investors had to navigate an activist SEC weaponized against this asset class,” Atkins said. “The result has been uncertainty and inefficiencies chasing crypto innovation outside of the U.S.”
