SEC

The SEC announced on Tuesday that it had filed a proposal titled “Regulation Crypto Assets”, giving crypto entrepreneurs a clearer, considerably lighter route to raising capital under federal securities law, according to the press release published by the regulator.

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It is the agency’s first formal rulemaking dedicated to crypto asset offerings, building on broader interpretive guidance the SEC issued in March, and would spare qualifying issuers the costly registration process required of most public offerings.

At the centre of the proposal sit two new exemptions.

The “startup exemption” would let an issuer raise up to $5 million (€4.3mn) over a four year period without registering the offering.

A second, the “fundraising exemption”, would permit raises of up to $75 million (€64.7mn) within any 12 month stretch, though issuers relying on it would still need to publish financial statements and meet ongoing reporting duties.

Both routes ask companies to give investors narrative, principles based disclosures, rather than the dense legal filings typically demanded of public listings.

The proposal also sets out a conditional safe harbour that could eventually place certain tokens outside the legal definition of a security, once an issuer has finished, or permanently abandoned, the managerial efforts it promised investors.

It would also override conflicting state registration rules for offerings made under the exemptions, sparing issuers from having to comply separately with individual state securities regimes.

SEC Chairman Paul Atkins described the package as a “minimum effective dose” of oversight, protecting investors while leaving builders maximum room to innovate.

The reception of the proposal has been largely warm.

Summer Mersinger, CEO of the Blockchain Association, said the move finally delivers the tailored regulatory clarity the sector has sought for years. Cody Carbone, CEO of the Digital Chamber, likewise praised the plan, pledging support in helping the industry expand within the US rather than abroad.

However, the proposal is far from final. It stays open for public comment for 60 days once published in the Federal Register, meaning its provisions could still change, or be scrapped, before any final rule is adopted.

US Senate stalls, regulator steps in

The SEC’s move comes roughly a week and a half after the US Senate left Washington for its summer recess without advancing the Digital Asset Market CLARITY Act (H.R. 3633), the industry’s flagship bill, which would split oversight of digital assets between the SEC and the US Commodity Futures Trading Commission.

US Senate Majority Leader John Thune filed a cloture motion on the bill on 7 August, but lawmakers departed before a vote was held. That motion is now due to come up again on 15 September, a procedural hurdle rather than a final vote, once senators return.

SEC Chairman Paul Atkins has argued on more than one occasion that only Congress can deliver a lasting, “future-proofed” framework able to survive changes in political leadership, and the Commission says it still backs the bill’s passage.

Even so, with its timetable slipping into autumn, the regulator appears to have decided not to wait, instead using powers it already holds to offer the industry some certainty while lawmakers prepare to resume the debate next month.

CHICAGO — After leaders of the Southeastern Conference spent last week warning of a Plan B to potentially “break away” from the NCAA, Big Ten commissioner Tony Petitti tried to steer away from that conversation and toward a Congressional solution on Tuesday.

But if Congress can’t pass the Protect College Sports Act in the coming weeks? Well, the conference is already talking contingency plans, Petitti said.

“Breakaway is a word that creates a lot of emotion,” Pettiti said during his annual Big Ten media day address on Tuesday. “Is there another path where if you can’t solve it in the bill and if you can’t solve it with your colleagues, is there some path where you have to have conference-based rules? That’s not necessarily breaking away. It doesn’t mean you’re not going to play anybody else. But is there a path to have rules that we can at least operate from the conference?

“We absolutely have to do everything we can to prepare for every one of those things.”

The future of college football continues to hang in the balance as Congress works to get the two power conferences on board with a bill that has not received their full support. Petitti said on Tuesday morning that he’d yet to see the new language of the Protect College Sports Act, which added revisions to appease the SEC and Big Ten, but expected to see it later Tuesday.

The commissioner said he didn’t expect the bill to be “perfect for us in every one one of those places,” but he expected concessions to be included in the newest version, including potential provisions around a super league, pre-enrollment inducements for high school prospects and a carve-out for up to $20 million in additional cap space to retain players.

Whether those concessions will be enough to get the two power conferences on board remains to be seen. Time is running out for a bill to be passed before Congress takes a lengthy recess, significantly delaying any meaningful reform in college athletics.

“If Congress is going to be involved in deciding who can be in what conference and when you can move and how you move and how you schedule based on certain things happening, we just need to get that right,” Petitti said. “And so we want to make sure that the productive conversations we’ve had the last couple of weeks on that section specifically are reflected in the drafting of the bill.”

Petitti said that the Big Ten would’ve preferred “a much skinnier bill” than the current version, but “that is not the reality right now.”

“Is there more good here than not, right?” Petitti said. “That’s the way to look at it.”

Passing that bill is the primary focus for now. It’s why Petitti has been to Washington 21 times, he said, during his tenure as commissioner. But other uncertainty still looms over the sport.

The Big Ten is still also pushing for a 24-team College Football Playoff, but Petitti said that the conference’s stance has evolved since he first started pushing the idea a year ago.

“We’ve made adjustments in our league,” Petitti said. “We were focused on automatic qualifiers. We’re not focused on that anymore. We’re looking at the committee picking the field of 24. We feel that ultimately will still unlock the power of scheduling that we want.”