The SEC’s new proposal could completely change how crypto is regulated. Here’s how.

The US Securities and Exchange Commission (SEC) has proposed new regulations for crypto. Watch the video above to hear all the details.

We have a massive monster humongous tremendous story today that dropped unexpectedly.

You guys know the the Biggie song, Kick in the door, I drop unexpectedly like Burj can’t say that word. But this is what happened with the SEC reg crypto that we’ve been waiting for.

So I reported to you last week that there was supposed to be a meeting on Friday to discuss and vote on the SEC’s regulation crypto and it was unexpectedly canceled on Thursday night with no rescheduling and people thought it was dead.

Oh, Paul Atkins was trolling you.

He is the commissioner, the head of the SEC and he dropped this yesterday. A lot of this echoing the ideas we’ve had from Hester purse for years. So this is what it does. This is the SEC’s proposing its first

permanent crypto specific fundraising rules. They are going ahead without the clarity Act. They know that this thing probably isn’t passing and it’s time for the SEC to step in and start to make rules.

So, there’s some wild things in here. First of all, the one I want to dig into the most. There’s a startup exemption. 5 million dollars total over four years, you’re allowed to raise for a token simply by presenting a white paper.

So think about this, if you’re a crypto company or a project that wants to launch a token in the United States, you can raise up to $5 million simply on a white paper without any major disclosures or having to have long conversations with the S

Now, remember, remember, in the Gensler SEC era, crypto companies were told to come in and register, even though there was absolutely no path to register.

Many of them literally went in to register, then heard nothing from the SEC and then got either a wells notice or a lawsuit because Gary Genzler was a scumbag. Right?

But now you can actually go in and register or you can just basically file a white paper and say we’ve got four years. Now what’s most interesting here, you can raise this $5 million from effectively anybody.

So anyone who understands accredited investor laws in the United States knows that for any other market, this is effectively impossible. It will be easier to raise funds in crypto for a token than it is to raise funds for your local coffee shop.

If I’m an unaccredited investor, I cannot invest in my friend’s business. Right? But what I can do now is send four to $5 million or you know, 1.25 from four people into a company without much regulation and invest in their token.

So they’re making this actually easier to launch a token than to launch any other kind of company in the United States. Pretty astounding. Now given, these are not the rules yet, I think there’s a 60-day wait period.

So yes, this money can come from non accredited investors with no individual investment limits, audited financials or prior SEC qualification. If you’re wondering if there’s a war

in the world for regulatory arbitrage to capture capture crypto innovation. This is all the evidence you ever needed. People as we know over the years have gone to Singapore and to Abu Dhabi and Dubai and Malta and places all around the world because they had more favorable regulators for launching tokens. Now the most favorable regulation you can possibly get is in the United States.

So all you have to do is disclose the team, token economics, risks, and what you’re actually promising to build, then you have four years to build it. Doesn’t mean you can rug poll by the way. But you actually have to build it in four years.

Now, there’s also formal lanes now for 20 million or $75 million annual raises. They just have more stringent requirements, uh financial statements, ongoing reporting, but still much looser than for most companies and you can raise up to $75 million. Now the most interesting part here is what I’ve talked about literally for years is the safe harbor proposal that would end SEC oversight once the issue promised managerial work is finished.

So we’ve long talked about the how we test and investment contracts and what is or is not a security.

So now you can launch a token and you will have a four-year period of safe harbor to become sufficiently decentralized by rules specifically laid out by the SEC and to basically remove yourself from the investment contract so that investors are not depending on you to see the token price go up. Think about that.

Four years you’re safe from being called a security or worrying about the regulator while you work on a path towards sufficient decentralization. This is incredibly sensible.

This has been proposed for years by purse when she didn’t have the support of a reasonable SEC chairperson. This is absolutely great news for crypto in the United States and once again, this is the regulator stepping ahead when they can’t get legisla legislation done.

Now it’s very uh very important to note that even Atkins himself has said this does not mean we don’t need law. If I step down or a new administration comes in and gets rid of me and we get a new SEC commissioner, if we get Gary Genzler 2.0 or something like that, they could just eliminate this rule making. So we still need the law, but this uh means you’re probably assuming this passes and goes through going to be good for the next two and a half years.

Source: finance.yahoo.com