WORLDTECHSEC crypto fundraising proposal draws bank warnings and legal threats
US banks and Wall Street firms filed opposing demands as the comment period on the Securities and Exchange Commission's proposed crypto exemptions closed, according to CryptoSlate. Community banks argued the plan could pull deposits away from them, while asset manager Bitwise pressed for wider access to digital tokens.
What the proposal would permit
The proposed Regulation Crypto Assets would let qualifying crypto projects raise up to $5 million over four years, or $75 million a year, without registering their investment-contract offerings under the Securities Act. Issuers would still have to meet disclosure requirements and federal antifraud provisions.
The plan also includes a conditional safe harbor under which a crypto asset could stop being treated as an investment contract once its issuer has completed or permanently abandoned the promised essential managerial work and filed a transition report with the SEC.
Banks and asset managers pull in opposite directions
Community banks warn of potential deposit flight of $1.3 trillion tied to stablecoin growth. Stablecoins are digital tokens designed to hold a fixed value, usually one dollar.
In its submission, Bitwise said fund sponsors currently face substantial uncertainty when judging whether a token still falls under an investment contract. The firm wants asset managers to rely on issuers' public transition reports once an SEC review period passes without a challenge. Traditional market operators offered more conditional support.
Legal challenges and contested authority
Investor advocates challenge the agency's authority to loosen securities requirements for digital assets. The Hyperliquid Policy Center objects to mandatory public analysis and seeks earlier protection, while another party wants usable Form TR filings.
Submissions came from Bitwise, Nasdaq, the Alternative Investment Management Association, community banks and investor advocates, and they reveal competing priorities that could shape the final rules.
Open questions
- Will the SEC narrow or delay the proposed exemptions after the comment period?
- Could legal challenges to the agency's authority delay or derail the plan?
- How will the SEC weigh deposit-flight warnings against demands for broader crypto access?