Galaxy Head of Research: SEC Proposes Crypto-Asset-Specific Rules, Potentially Providing a Legal Pathway for Token Issuance in the U.S.

Odaily News Galaxy Head of Research Alex Thorn stated that the U.S. Securities and Exchange Commission (SEC) proposed the "Regulation Crypto Assets" (referred to as "Reg Crypto") on August 18. This marks the first set of securities rules specifically designed for the issuance and sale of crypto assets in the U.S., rather than simply applying traditional stock regulatory frameworks. The proposal could bring two significant changes to the U.S. crypto industry: first, it would allow eligible token projects to conduct lawful issuances to the public, including non-accredited investors; second, it would establish a clear mechanism to formally terminate investment contracts related to tokens once conditions are met, thereby resolving the long-standing uncertainty over the securities status of numerous historical tokens.

According to the proposal, Reg Crypto would apply to crypto assets that "do not themselves constitute securities but were issued or sold as part of investment contracts." The framework mainly consists of four stages:

- Financing stage: Two new types of issuance exemptions are introduced, with the startup exemption allowing projects to raise up to $5 million over a maximum of four years; a larger Regulation A-like exemption permits raising between $20 million and $75 million within 12 months.

- Disclosure stage: Issuers must disclose token supply, unlock schedules, minting and burning mechanisms, governance rights, smart contract information, source code, and project development progress, among other information more tailored to the characteristics of crypto assets.

- Development stage: Projects must complete the core development commitments made to investors within a specified timeframe.

- Exit stage: Once a project completes or ceases its related development obligations and submits a transition report, the investment contracts associated with the tokens can be deemed terminated, and the tokens are no longer subject to securities regulation under those investment contracts.

Alex Thorn believes that the key significance of Reg Crypto lies in establishing, for the first time, a regulatory framework for the "token lifecycle," meaning tokens may initially constitute investment contracts due to project development commitments, but as the project matures, that securities status can be ended through a clear process. The SEC estimates that about 475 issuers per year might use the investment contract safe harbor mechanism, with approximately 130 projects actually utilizing the new financing exemptions. This suggests that the rule's short-term impact may be more focused on resolving regulatory uncertainty for existing tokens rather than immediately driving a new wave of token issuances. However, the rule remains in the proposal stage, and its final implementation still faces regulatory changes, challenges from state regulators, and the influence of congressional legislation. If ultimately approved, Reg Crypto could usher in a "legal ICO 2.0" for the U.S., establishing a new regulatory foundation for project financing, token circulation, and investor protection.