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The Securities and Exchange Commission on Aug. 18 proposed Regulation Crypto Assets (“Reg Crypto”), the first set of U.S. securities rules designed specifically around the offer and sale of crypto assets rather than adapted from rules written for corporate stock.

First, the proposal would create a lawful path to sell certain tokens to the U.S. public, including non-accredited buyers, without a registered offering. Second, it would create a formal, dated mechanism for the investment contract associated with a token to cease to exist. For most of the past decade, a U.S. token issuer…