The US Securities and Exchange Commission proposed on August 18 new draft rules called Regulation Crypto Assets covering investment contracts in crypto assets. The core of the proposal is two exemptions from registration requirements under the Securities Act of 1933: a startup exemption allowing raises of up to 5 million dollars over four years without full securities registration, and a funding exemption allowing raises of up to 75 million dollars every 12 months. The latter is conditioned on submitting financial statements and ongoing reporting; both require disclosures, and anti-fraud and anti-manipulation provisions continue to apply. The proposal also creates a conditional safe harbor that can separate crypto assets from investment contracts if conditions are met, and includes a provision giving federal law precedence over state securities law registration and qualification requirements. SEC Chairman Paul S. Atkins said that as Congress works toward a permanent regulatory framework, the draft rules provide a clear path for crypto entrepreneurs and market participants to raise funds under federal securities laws. The SEC abruptly cancelled a meeting to consider the matter last Friday, citing unexpected scheduling issues, and then reversed course with this proposal. The backdrop includes the stalled crypto market structure bill known as the CLARITY Act, which has struggled amid industry and bank disputes over stablecoins. A procedural vote is expected in mid-September, but with the November midterm elections approaching, time is short.
Bitcoin Rallies to Two-Week High Above $80,000 as Altcoins Outperform
Bitcoin rallied to a two-week high on Friday, climbing back above the psychologically important $80,000 level, with the broader crypto market joining the advance. According to Bitget Wallet research analyst Lacie Zhang, US spot ETF inflows and short covering helped push it through the psychologically important $80,000 level. The surge came despite a Fed rate hike earlier in the week and the failure of the Clarity Act, legislation that would have created a federal framework for the broader digital asset industry; after the measure failed to advance in the Senate, the Securities and Exchange Commission stepped in on Thursday with a conditional exemption allowing the trading of certain tokenized stocks on blockchains for the next five years. While bitcoin led the move, ether, binance and solana have outperformed over the past month, gaining 35%, 25% and 41% respectively, and rotation into alternative tokens and tokenized versions of Nvidia, Tesla and the S&P 500 helped lift the total crypto market capitalization to $2.66 trillion, according to CoinMarketCap. Fundstrat's Sean Farrell said crypto has absorbed a fairly aggressive hawkish repricing without much damage, while Compass Point's Ed Engel last week upgraded Coinbase to Neutral from Sell, citing that BTC is recovering from a cyclical bottom.
ECB President Personally Intervened to Block Binance's MiCA Approval, WSJ Reports
European Central Bank President Christine Lagarde personally intervened to stop crypto exchange Binance from obtaining authorization within the European Union, the Wall Street Journal reported on September 18. Binance had applied for authorization under the EU's Markets in Crypto-Assets regulation, MiCA, through the Hellenic Capital Market Commission, but withdrew its application on June 24 and indicated it would seek approval in another EU member state. MiCA's transition period ended on July 1, and unauthorized operators are in principle required to stop accepting or soliciting new customers, yet as of September 4 Binance remained unauthorized while continuing to serve some EU customers, citing the reverse solicitation exemption. According to the WSJ report, Greek authorities told Binance by late May that the application process was complete, and the company, expecting approval, was preparing an announcement, but officials later said Lagarde intended to hold off on a decision until a reform transferring authority over crypto firm licensing to the European Securities and Markets Authority is realized. Approval in Greece was seen as important because it would open access to the entire EU market through MiCA Article 65's EU passporting regime, and although licensing decisions rest with each member state's competent authority and the ECB has no formal power, Lagarde was reportedly concerned that Binance's EU expansion would spread the use of dollar-denominated stablecoins and hinder adoption of the digital euro and euro-denominated payment methods.
SEC Unveils Trading Framework for Tokenized Stocks, S&P Acquires OpenZeppelin, DeFi Market Cap Hits $80 Billion
The U.S. Securities and Exchange Commission introduced a provisional, conditional exemption allowing certain tokenized U.S.-listed equities to trade on-chain under specified conditions, while S&P Global agreed to acquire OpenZeppelin, a firm specializing in smart contract security infrastructure. The SEC measure, set out in a "Statement on Innovation Exemptions" signed by Commissioner Mark T. Ueda, guarantees holders of equity tokens the same rights as holders of conventional shares and requires third parties to notify the issuer of the underlying stock in writing before dealing in tokenized shares. According to S&P Global, OpenZeppelin's technology has supported the transfer of more than $37 trillion in value cumulatively, including major stablecoins and tokenized funds. Following these announcements, the market capitalization of DeFi-related tokens rose about $7 billion on Friday, climbing 8.8% to $79.8 billion, while the total market capitalization of the broader crypto market rose 4% to $2.7 trillion. Hyperliquid's HYPE jumped 10.8% to an all-time high of about $90.46, giving it a market capitalization of $20.12 billion; Uniswap's UNI rose 29.1% over 24 hours to about $9.00, for a market capitalization of $5.59 billion; and Aave's AAVE gained 9.5% to about $135.28. Bitwise Chief Investment Officer Matt Hougan said the SEC is trying to put in place as much of a crypto regulatory framework as it can under its existing authority, and described tokenization as a massive tide.
