SEC’s Paul Atkins Proposes Crypto Safe Harbour Framework

• Atkins revealed his idea for an “investment contract safe harbour” would provide crypto asset issuers and buyers a guarantee.
• Atkins further went on to mention that he anticipates the SEC issuing proposed rules for the exemptions for public comment in the near future.

The chairman of the US SEC, Paul Atkins, has mentioned that the agency should consider a “safe harbour proposal” to offer crypto firms and some tokens a regulatory carveout. 

On March 17, Atkins attended a crypto lobby event in Washington, DC, in which he mentioned that his safe harbour proposal was made up of a “startup exemption”, a “fundraising exemption”, and an “investment contract safe harbour”.

He further stated that it is past time for us to put a stop to diagnosing the problem and initiate offering the solution. Such a safe harbour would offer crypto innovators bespoke pathways to generate capital in the United States while offering the right investor protections. 

The SEC and the Commodity Futures Trading Commission (CFTC), on the same day, also released an interpretation that included clarification on what types of cryptocurrencies are securities and how “non-security crypto assets” could fall under securities laws. 

Explaining the Exemptions 

Talking about startup exemption, Atkins mentioned that it should be considered to permit crypto firms to generate a defined amount of money or function for a few years with ample regulatory runway to make it to maturity. 

He also added a “fundraising exemption” to permit investment contracts comprising crypto to generate a particular amount in any 12-month period while being free from registering under securities laws. 

Atkins revealed his idea for an “investment contract safe harbour” would provide crypto asset issuers and buyers a guarantee regarding when assets are subject to securities laws. The safe harbour could be imposed once an issuer has stopped all mandatory managerial efforts forever that it promised for the asset. 

Atkins further went on to mention that he anticipates the SEC issuing proposed rules for the exemptions for public comment in the near future. A bill to highlight the SEC’s crypto remit is still stalled in the Senate as negotiations over its provisions are continuing. 

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