SEC Crypto Offering Plan Leaves States, Platforms Guessing

David Fredrickson’s commentary was featured in a Law360 article discussing the SEC’s proposed Regulation Crypto Assets, a new framework intended to facilitate cryptocurrency offerings. According to Law360, the proposal mirrors other capital formation initiatives, such as Regulation A, by easing registration requirements, but significant questions remain regarding how the framework would operate in practice.

One key area of uncertainty is secondary trading. While the proposal would provide crypto issuers with a clearer path to reaching retail investors and achieving secondary market liquidity, it does not specify where or how those secondary market transactions could occur.

David noted that although the proposal offers registration exemptions for issuers, it does not provide comparable relief from broker-dealer or exchange registration requirements for the platforms most likely to facilitate trading in the tokens.

"Brokers, dealers, exchanges, I didn't see anything about them, and so I'm not sure what the answer is after the initial offer and sale of these, how you're supposed to buy and sell them," David said.