SEC Unveils New Digital Asset Framework: A 'Startup' Exemption for Crypto Fundraising and a Push to Ease IPO Burdens

The U.S. Securities and Exchange Commission (SEC) this week published a proposed regulatory framework for crypto assets, seeking to replace the enforcement-driven approach of the past with clear rules. In an interview, SEC Commissioner Mark Uyeda laid out the thinking behind the proposal and framed it within the same "reduce burdens, improve efficiency" policy logic driving the administration's IPO reform efforts.

From "regulation by enforcement" to rules first

Uyeda recalled that during the previous regulatory era, the SEC's main approach to the crypto industry was "regulation by enforcement," with the overall goal described as preventing crypto businesses from taking root in the United States. He summarized the current phase as three progressive goals:

• First, stop "regulation by enforcement" and withdraw a batch of cases in which the SEC's claims were difficult to sustain;
• Second, issue significant interpretive guidance on the scope of jurisdiction;
• Third, work with Congress to advance rulemaking and establish a written framework.

He stressed that the goal of the proposal is to replace regulatory "guesswork" with clear rules, giving market participants a more predictable path.

Core of the proposal: two types of fundraising exemptions

According to Uyeda's remarks in the interview, the proposal designs a tiered fundraising exemption arrangement for crypto founders:

• Startup-phase exemption: within a four-year period and with a maximum fundraising size of $5 million, issuers need only provide basic disclosures, with the core requirement being to "tell the truth."
• Larger-scale exemption: up to $75 million in any 12-month period, subject to more complete disclosure and reporting requirements, modeled on the existing Regulation A framework for small businesses.

He explained that this approach does not start from scratch but instead "adapts existing frameworks to crypto characteristics" so that they genuinely serve the fundraising process.

Moving in step with IPO reform

The interview also noted that the administration has made "making IPOs attractive again" part of its capital markets agenda. Uyeda said that early in its tenure, the SEC halted a batch of proposals deemed to significantly increase the burden of going public, on the grounds that such rules could turn listings into targets for litigation risk and thereby weaken founders' willingness to bring innovative companies to the public markets.

He noted that the current focus has shifted to how to modernize listing rules so they fit the 21st-century public company ecosystem; as for the timing of specific companies' listings, that depends on issuers and underwriters, as well as market conditions and investor demand (retail and institutional).

What it means for crypto companies and investors

On investor protection, Uyeda stressed that the regulator's job is not to judge whether an investment is good or bad, but to ensure that disclosures are accurate in all material respects and to guard against fraud and market manipulation, leaving investors to decide for themselves whether an asset suits their portfolio.

For crypto companies, if the proposal is ultimately adopted, it would mean a clearer compliance path and disclosure standards for raising funds on U.S. soil; for the broader capital markets, it forms, together with IPO rule modernization, a combined policy package that reduces compliance uncertainty and attracts issuers and capital. It should be noted that the above remains at the proposal and legislative discussion stage, and the specific terms are subject to the final texts from the SEC and Congress.