SEC Chairman Calls for Regulation A Reform, an Outdated Capital Raising Regulation That Could Facilitate Public Funding for Crypto Projects.
In a notable development that could open new prospects for the cryptocurrency market, the Chairman of the U.S. Securities and Exchange Commission (SEC) Paul S. Atkins has officially issued a call for reform of Regulation A – an important legal framework in capital raising activities.
Speaking at the Small Business Capital Formation Advisory Committee meeting held on Tuesday in Washington D.C., Mr. Atkins emphasized that the current framework does not effectively serve many issuing organizations, especially projects related to crypto assets.
"Regulation A has never been a viable legal framework for widespread capital raising, particularly for issuers involving certain types of crypto asset securities, because compliance costs are too high relative to scale," the SEC Chairman stated directly.
Specific Reform Proposals
Chairman Atkins raised several important guiding questions for the Committee to consider, including whether to allow "at-the-market" issuance (direct market sales at current prices) – currently prohibited – to increase capital access without harming investors. He also mentioned reviewing the elimination of state-specific regulations for securities transfers under Tier 2, aimed at improving liquidation in the secondary market.
Notably, the SEC Chairman's specific mention of crypto asset issuers represents a significant change in regulatory tone. This suggests that the SEC may be ready to integrate digital innovation into existing capital market infrastructure, opening new opportunities for blockchain projects to raise legal capital.
Although Regulation A was improved by raising the issuance ceiling from $50 million to $75 million in 2021, issuance activities under this regulation have continued to decline over the past two years, indicating that efforts to promote adoption have not been truly effective.
