A Crypto Market Revolution: US Unveils Major Regulatory Shift

The US Securities and Exchange Commission (SEC) is advancing a new proposal that could significantly reshape the crypto market, fundamentally altering the relationships between companies, entrepreneurs, investors, and regulators. This move aims to establish a clear regulatory framework for digital assets, ending years of legal uncertainty.

According to the Crypto Jungle report, the proposal centers on two paths that allow crypto entrepreneurs to raise capital under more lenient conditions, bypassing the full registration process typically required under the US Securities Act of 1933:

1. The first path: offering digital assets worth up to $5 million over a four-year period.

2. The second path: raising up to $75 million over a 12-month period.

In exchange for these exemptions, the SEC mandates greater transparency. Entrepreneurs must provide clear disclosures regarding project goals and risks. Companies opting for the $75 million path will also be required to submit financial reports and comply with ongoing reporting obligations.

A cornerstone of the proposal is the "safe harbor" mechanism. Under this framework, crypto projects meeting specific criteria related to decentralized and active networks may not be classified as "investment contracts." By excluding these assets from the traditional definition of a security, the SEC aims to provide entrepreneurs with significantly greater legal certainty.

The proposal also seeks to reduce state-level regulatory burdens, potentially offering exemptions from state registration requirements and providing relief for certain secondary market transactions.

Although the proposal is domestic, its impact is expected to be global. As the United States is a central hub for the global capital market, a shift in its regulatory approach will likely influence investment volumes, liquidity, and trading activity worldwide. A clearer framework may also encourage traditional financial entities—such as banks and institutional funds that have previously avoided crypto assets due to regulatory ambiguity—to enter the space.

International projects, including those originating in Israel, may gain easier access to American investors should the proposal be adopted. Furthermore, this shift could trigger a regulatory domino effect, with other nations potentially adopting the American model, thereby impacting the global digital industry.

The SEC Chairman stated that the goal is to provide "clear paths for entrepreneurs" to prevent companies from leaving the United States due to regulatory uncertainty.

The proposal has now entered a 60-day public comment period. Following this, the commission will review feedback and determine the next steps for implementation.