The SEC proposed Regulation Crypto Assets, creating three fundraising paths for token projects: up to $5 million for startups, $20 million for Tier 1, and $75 million for Tier 2, all within a twelve-month period. The proposal establishes Rule 400, a safe harbor allowing issuers to end the investment contract once they have completed or permanently ceased the work promised to buyers. Comments are due October 20, and no exemption can be used before a final rule is adopted. The fundraising paths include ongoing disclosure requirements through three new forms and preempt state registration requirements for eligible sales.
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