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The Securities and Exchange Commission spent Tuesday proposing the friendliest set of crypto rules an American regulator has ever put on paper. On Wednesday, the industry that would benefit from them was at the White House, having lunch with the president.
Donald Trump hosted crypto executives and trade body officials in Washington alongside Paul Atkins, who chairs the SEC, Mike Selig of the Commodity Futures Trading Commission, and Patrick Witt, the administration’s crypto adviser.
It is a guest list that would raise eyebrows in a normal week, and this was not one, given that Trump has reported roughly $1.4bn in crypto income from his family’s ventures.
The proposal on the table is called Regulation Crypto Assets, and it does something the sector has wanted for the better part of a decade. It creates two registration exemptions: one covering a single offering of up to $5m over four years, and a larger one allowing up to $75m in any 12-month period, both based on narrative disclosures rather than the full securities regime.
The more consequential piece is a conditional safe harbour. Under the SEC’s own description, a token could fall outside the definition of an investment contract entirely once its issuer has finished or permanently abandoned the managerial work it promised investors, which is the point at which the agency considers the asset to have stopped being a bet on a founder.
“This proposal would allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract,” Atkins said in the commission’s announcement.
The rules would also pre-empt state registration requirements for qualifying offerings and certain secondary trades, removing a layer of enforcement that has caught out more than one token issuer.
It builds on interpretive guidance the commission issued in March, which sketched the same logic without giving issuers anything they could rely on in court. The difference now is that the reasoning would be written into the rulebook, and the SEC has invited comment on whether the thresholds are set at the right level.
Nobody in the industry is treating the exemptions as the main event. The safe harbour is because it decides whether a token that has finished its development phase is a security at all, and that single question has driven most crypto enforcement in the US since 2017.
Comments are open for 60 days from publication in the Federal Register, which pushes any final rule well into next year. The CFTC was due to set out its own thinking at an industry gathering on Thursday.
What the agencies are doing, in effect, is building by regulation what Congress has failed to build by statute. Comprehensive crypto legislation has been stuck on Capitol Hill for months with little floor time left this year, and the White House has stopped waiting for it.
The conflict-of-interest question travels with every one of these meetings. Trump’s family businesses include World Liberty Financial and a memecoin whose investors lost billions while the family took fees, and the president has said consistently that he plays no day-to-day role and that his investments are managed independently of him.
Reuters and Ipsos polling have found that most Americans believe the president and his family have profited inappropriately from crypto since his return to office, and that his policy choices are shaped by those interests.
None of that is a legal obstacle to the SEC’s proposal, which was drafted by an independent agency and will be judged on its own terms during the comment period. It does mean that a rule easing token sales arrives with the president’s own token ventures in the frame, including World Liberty’s tangled backers.
For the executives in the room, the timing was close to ideal. A safe harbour, two exemptions, state preemption, and a sympathetic chair at both market regulators are more than the industry got from four years of litigation, and it took two days.
The proposal is a proposal, and it has to survive a comment period, a commission vote, and the near-certainty of a legal challenge from whoever loses.
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Source: thenextweb.com