Galaxy Research Head: US SEC Crypto Asset-Specific Rules Could End Securities Status Disputes, Opening New Channel for US Market

PANews reported on August 22 that Galaxy research head Alex Thorn said the U.S. Securities and Exchange Commission (SEC) proposed the Regulation Crypto Assets (“Reg Crypto”) on August 18, the first set of U.S. securities rules specifically designed for the issuance and sale of crypto assets, rather than simply applying the traditional stock regulatory framework.

Alex Thorn pointed out that the proposal could bring two important changes to the U.S. crypto industry: first, it would allow qualifying token projects to legally issue to the public, including non-accredited investors; second, it would establish a clear mechanism for investment contracts related to tokens to formally terminate once conditions are met, thereby resolving the long-standing uncertainty over the securities status of a large number of legacy tokens.

According to the proposal, Reg Crypto would apply to crypto assets that “are not themselves securities, but were issued or sold as part of an investment contract.” The framework mainly includes four stages: financing stage, information disclosure stage, development stage, and exit stage.

Alex Thorn believes the significance of Reg Crypto lies in establishing for the first time a “token lifecycle” regulatory framework, under which a token may constitute an investment contract in its early stages due to project-building promises, but as the project matures, that securities status can end through a clear process. The SEC estimates that about 475 issuers per year may use the investment contract safe harbor mechanism, while the number of projects actually using the new financing exemption is expected to be about 130, meaning the rule’s near-term impact may be more reflected in resolving regulatory uncertainty for existing tokens rather than immediately triggering a new wave of token issuance.

Alex Thorn said the SEC’s proposal shows regulators are beginning to recognize that token issuance is fundamentally different from traditional stock issuance, and that crypto asset investors need different key information, such as token supply, smart contract permissions, and ecosystem development progress, rather than the financial metrics of traditional companies. However, he also noted that the rule is still at the proposal stage, and its final implementation still faces regulatory changes, challenges from state regulators, and the impact of congressional legislation. If ultimately adopted, Reg Crypto could push the United States toward a “legal version of ICO 2.0,” establishing a new regulatory foundation for project financing, token circulation, and investor protection.