On August 18, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins introduced the "Crypto-Asset Rule" as a capital formation policy aimed at changing what he characterized as the SEC's previous resistance to crypto capital formation. The proposal includes offering mechanisms, disclosure obligations, and "safe harbor" provisions.
Atkins argued that the SEC's past practice forced issuers offering crypto assets that are not securities via investment contracts to apply securities rules designed for other markets, creating complexities that contributed to the relocation of activities abroad. In his official statement, he noted that specially tailored exemptions could attract entrepreneurs back while preserving core investor protections and ensuring the central role of U.S. markets in financial innovation.
While Atkins supported using the SEC's existing authority, he placed Congressional legislation above administrative measures, considering it a solid foundation for the crypto market framework. His support for the CLARITY Act reflects his concern that a future regulator could overturn the Commission's work.
The SEC Chairman stated:
"The SEC has supported and will continue to support Congress in getting the CLARITY Act to President Trump's desk for his signature."
Atkins also acknowledged Commissioner Hester Peirce's contribution to creating the intellectual foundation for the "safe harbor" rule after years of advocating for a clearly defined path for network development. He characterized this proposal as embodying her original idea, while his broader regulatory agenda linked crypto clarity to capital formation, tokenized securities, and broader efforts to modernize U.S. markets.
Peirce Acknowledges Public Contribution and Staff Work
SEC Commissioner Peirce focused on the proposal's development, describing the rulemaking process as the result of broad public participation and staff work. In her August 18 statement, Peirce noted that feedback from both crypto supporters and critics helped shape the concept after the Crypto Working Group solicited industry input.
Peirce emphasized that clear rules are necessary for those aiming to build legal products, while also allowing regulators to enforce consistent standards. She also acknowledged that exemptions and "safe harbor" provisions would not be suitable for all business models.
The Commissioner stated:
"This proposal is one step on a long journey to creating a clear, sensible, and enforceable regulatory framework for crypto assets."
Uyeda: Rulemaking Can Replace Guesswork
SEC Commissioner Uyeda emphasized predictability, noting that fixed thresholds and disclosure obligations would allow issuers to assess compliance before conducting an offering. In his statement on the "Crypto-Asset Rule," he contrasted this model with enforcement actions where market participants had to infer for themselves how facts from individual cases might apply to their own activities.
Uyeda noted that the Commission's previous approach deprived entrepreneurs of a realistic opportunity to register crypto funding rounds and sometimes resulted in good-faith actions being met not with answers but with subpoenas or litigation. This criticism aligns with the agency's broader push for formal crypto rulemaking under Atkins' leadership, although the "Crypto-Asset Rule" remains a proposal, not an active exemption, for now.
Investor protection remains part of the policy discussion as the Commission considers whether reduced registration obligations could create new risks in primary and secondary markets. Previously expressed Congressional criticism of similar SEC exemptions has questioned the agency's direction, while Atkins and Uyeda linked clearer rules to enhanced domestic investor protection, and Peirce emphasized the importance of investor protection and market integrity.
