Key Points

• This is the most significant step the SEC has taken toward providing clarity to its regulation of crypto assets. The proposal thoughtfully draws clear lines in many areas, often taking out the guesswork of whether something may be a crypto asset security.
• It would provide a path for small startups, U.S.-based issuers conducting offerings of up to $20 million or $75 million over a single year, and issuers planning to relinquish control over their projects. Large projects and tokenized equities offerings likely would not qualify for a proposed exemption.
• While the rule generally does a good job of avoiding the regulatory ambiguity that has kept many on the sidelines, there are a few…