SEC's encrypted "safe harbor" proposal submitted for White House review, may be announced soon

SEC Chairman Paul Atkins stated that a proposal for a "safe harbor" framework aimed at providing startup exemptions for crypto projects has been submitted to the White House's Office of Information and Regulatory Affairs (OIRA) for review, which is the final step before formal release.

The proposal includes a "startup exemption" that allows stakeholders in the crypto industry to raise a certain amount of funds over four years while providing specific disclosures. Additionally, Atkins proposed an "investment contract safe harbor" in conjunction with the token classification interpretive guidance released by the SEC in March of this year.

Atkins pointed out that legislation is necessary because it can provide a more solid and lasting regulatory framework than agency rulemaking. Furthermore, the SEC is also exploring an "innovation exemption" as a regulatory sandbox for on-chain assets. This proposal has sparked extensive discussions between crypto supporters and traditional financial institutions over the past year. Atkins stated that the SEC has the authority to advance the innovation exemption and will announce relevant parameters soon. He believes there is still much work to be done in this area.