WuBlockchain republished a 10-question, 10-answer post by Meng Yan on the SEC’s proposed Regulation Crypto Assets framework. According to the post, the proposal is still in its public comment period, which ends on Oct. 20.
Meng said the rulemaking path would be: public comment, adoption of a final rule, formal publication and statutory review, and automatic effectiveness 30 days later. He added that the proposal is still only at the first step, making the final effective date difficult to estimate. If everything moves smoothly, it could be implemented in the first half of 2027. If conditions change, it could also be shelved indefinitely.
Fundraising caps and timing
On the fundraising limit under the Fundraising exemption, Meng said the cap is measured on a rolling 12-month basis rather than as a lifetime total.
- Tier 1 projects would be allowed to raise up to $20 million every 12 months.
- Tier 2 projects would be allowed to raise up to $75 million every 12 months.
Under the Startup exemption, the total fundraising cap would be $5 million.
Investor exits and eligibility
Meng said investors would be allowed to exit during the Fundraising exemption period, but the amount exited could not exceed 30% of the total amount raised in that round.
He also said the proposal does not limit participation to accredited investors. Non-accredited investors could take part as well.
The conditions differ by stage:
- During the Startup exemption stage, if total fundraising is below $5 million, there is no individual investment cap.
- During the Fundraising exemption stage, non-accredited investors could not invest more than 10% of the higher of their net worth or annual income.
No stated limit on combined duration or token distribution at exit
Asked whether there is any time limit on the combined Startup exemption and Fundraising exemption period, and whether there are token distribution requirements at exit, Meng said the SEC proposal does not mention either point.
He noted that an earlier Token Safe Harbor proposal included a 36-month limited safe-harbor period, while the Clarity Act includes an 18-month time limit. He also said the Token Safe Harbor proposal required that no party hold more than 20% of the token interest when a project exits the safe harbor. Those provisions are not included in the current SEC proposal.
How it interacts with the Clarity Act
If the Clarity Act is later passed and conflicts with the SEC’s new rule, Meng said the Clarity Act would prevail.
If the Clarity Act stalls but the SEC rule is formally adopted, he said the rule could still take effect on its own.
On whether the SEC proposal contains a matching framework for the new crypto-asset regulatory design described in the Clarity Act, Meng said it does not. Rules on anti-money laundering, counter-terrorist financing and customer protection would still be governed by existing law.
Meng Yan’s view and who can participate
In his personal assessment, Meng called the proposal highly significant. He said it is roughly equivalent to allowing compliant ICOs. If it passes, he expects that after several years, a considerable share of startups may raise funds directly through tokens.
At the same time, he said that if the Clarity Act does not pass, the regulatory framework would not be updated, which could introduce a new round of speculative risk. He added that policy reversals cannot be ruled out.
On participation by Chinese communities, Meng said startups from mainland China would not be able to participate and advised against pursuing that route. Overseas Chinese could start businesses and invest in line with local laws and regulations. He said Singapore would most likely be fine, while Hong Kong remains unclear.