Ripple Labs Inc. pressed U.S. securities regulators to adopt a proposed crypto offering framework, while Public Citizen warned the exemptions could weaken safeguards for retail investors.
The SEC introduced Regulation Crypto Assets on Aug. 18 and set an Oct. 20 deadline for comments. Under the plan, a startup exemption would permit eligible issuers to raise up to $5 million over four years. A separate fundraising exemption would cap Tier 1 offerings at $20 million and Tier 2 offerings at $75 million during any 12-month period.
Issuers using either route would face disclosure duties and federal antifraud and antimanipulation rules. Both Tier 1 and Tier 2 issuers would provide financial statements and ongoing reports, while Tier 2 financial statements would require an audit.
Ripple's Oct. 20 letter supports a final rule but asks the agency to distinguish an investment contract involving a crypto asset from the asset itself. Ripple wants clearer guidance for exchanges and other intermediaries relying on an issuer's proposed Form TR filing, which would identify when promised managerial work has ended. It also seeks revisions affecting some broker-dealer trades in secondary markets.
Ripple cited its earlier legal fight with the SEC as a reason to clarify that distinction and said it spent more than $150 million in legal fees.
Chainlink Head of Policy Taylor Barr said the company and Hedera, Aptos, Ava Labs and Stellar want the SEC to include its digital commodity framework in the final rule. The request concerns the agency's March interpretation, which identified examples of digital commodities based on their characteristics at the time.
The SEC's March interpretation says a crypto asset may fall outside the definition of a security even when a transaction involving it is governed by securities law. Barr said the groups seek lasting clarity for developers.
Public Citizen asked the SEC to withdraw the proposal in an Oct. 20 comment, arguing that the exemptions and safe harbor would reduce safeguards for retail investors. The SEC says its plan aims to ease capital raising, including pressures that may drive offerings offshore.
The public comment deadline has passed, and the SEC has set no date for a final decision.
