SEC Proposes to End Cryptocurrency Regulatory Gray Area! Chairman Paul Atkins Pushes "Safe Harbor" and New Fundraising Exemption Rules

The Chair of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, stated on Tuesday that the SEC is pushing forward a new regulatory framework for digital assets. The goal is to resolve years of debate over which crypto assets qualify as securities and to provide clearer compliance pathways for crypto companies to raise funds and operate in the U.S. through token classification, investment contract interpretation, and “safe harbor” arrangements.

During his speech at the “DC Blockchain Summit” in Washington on Tuesday, Atkins pointed out that the SEC is implementing a token classification and investment contract interpretation framework that explicitly categorizes digital commodities, digital collectibles, digital tools, and payment stablecoins that meet the GENIUS Act as assets not considered securities. In contrast, traditional securities that are tokenized will still be primarily regulated under securities laws.

SEC Clarifies Core Issue: When Do Tokens No Longer Fall Under Securities Laws?
Atkins explained that even if a particular crypto asset itself is not classified as a security, it may still fall under federal securities law if its issuance and sale constitute an investment contract. However, the new framework will further clarify that once the issuer has completed or permanently ceased its key management commitments, the related crypto assets are expected to be outside the scope of securities laws.
He emphasized that the SEC’s new interpretation will require project teams to clearly disclose their commitments and statements to investors, and that these management efforts relied upon by investors must be “explicit and unambiguous.” This indicates that regulatory focus will shift more toward the promises, disclosures, and management responsibilities during the issuance process, rather than solely judging based on the asset’s form.

“Safe Harbor” Proposal Emerges: New Fundraising and Token Issuance May Be Exempt
In terms of specific system design, Atkins previewed that the SEC plans to consider issuing proposed rules for public comment within the next few weeks, focusing on three main mechanisms.
First is the “Startup Exemption.” Under Atkins’ concept, this would be a time-limited registration exemption applicable to the issuance of investment contracts involving certain crypto assets, potentially lasting up to four years, allowing developers to advance their projects during this period. The exemption may also permit projects to raise up to approximately $5 million within four years, with a requirement to notify the SEC and complete filings upon exiting the exemption.

Second is the “Fundraising Exemption.” Atkins suggested that the SEC could consider establishing a new issuance exemption allowing qualified issuers to raise up to about $75 million within 12 months, while maintaining flexibility to use other securities law exemptions. Under this proposal, issuers would need to submit disclosure documents to the SEC, including general disclosures, financial condition explanations, and financial statements.

Third is the highly anticipated “Investment Contract Safe Harbor.” Atkins indicated that this arrangement would allow certain crypto assets to no longer be considered securities once the issuer has fulfilled its prior core management commitments, providing more rule-based legal certainty for issuers, trading platforms, and investors.

SEC Shifts Toward Institutionalization, Sending a More Friendly Signal to the Industry
Atkins’ proposal of a safe harbor makes it easier for crypto companies to sell tokens and raise funds, signaling a further institutionalization of the SEC’s stance toward the digital asset industry.

Compared to the regulatory environment in the U.S. over the past few years, this statement clearly indicates a policy shift. Atkins explicitly stated during his speech that market participants have lacked clear guidance for over a decade, and the SEC’s previous failure to provide definitive answers to key questions will now come to an end.