A proposed safe harbor framework to allow crypto projects to launch without needing to register right away is now in the White House's hands, according to Securities and Exchange Commission Chair Paul Atkins. 

On Monday, at a digital assets summit hosted by Vanderbilt University and the Blockchain Association, Atkins said the proposal, introduced last month, has advanced to the Office of Information and Regulatory Affairs (OIRA), a division within the Office of Management and Budget that reviews federal regulations before publication.

"We'll have reg crypto that we'll be proposing here shortly," Atkins said. "It's in fact at OIRA right now, which is the next step before being published, so that's exciting." 

Last month, Atkins put forward his safe harbor proposal that would include a "startup exemption" to allow crypto stakeholders to raise capital while also including investor protections. An exemption would allow people to raise a certain amount of money during a four-year period while providing specific disclosures.

Atkins had also proposed an "investment contract safe harbor" which would pair up with token taxonomy-based interpretive guidance released by the SEC in March. 

That token taxonomy was a pivotal moment for those in the crypto industry, representing the first time the SEC had set out clear parameters in one document for which and when digital assets would be considered securities.

Regulations and roadblocks

The regulatory effort comes as lawmakers in Washington are working on legislation to regulate the crypto industry broadly, but it has been met with several roadblocks over the past year. 

Atkins said the bill was necessary because regulators like the SEC "need something chiseled in stone." Unlike agency rulemaking, legislation provides a level of permanence that is less vulnerable to changes in presidential administrations.

"We can do a lot regulatorily, but we just have to make sure it takes root and can't be done away with," Atkins said on Monday. 

Separately, the SEC is also working on an innovation exemption that could function as a sort of regulatory sandbox for onchain assets. The idea of an exemption has sparked debate over the past year between crypto advocates and traditional finance institutions, who say that broad exemptions would undermine investor protection and market surveillance. 

Citadel Securities has urged the SEC to go through notice-and-comment rulemaking, while the Blockchain Association said on Monday that traditional rulemaking is not essential. The group argued that the SEC had previously relied on exemptions and had the authority to do so. 

At the event on Monday, Atkins said the agency has the authority to pursue an exemption. 

"We'll be coming out with our parameters around that innovation exemption," Atkins said. "I'm really excited about that. I think there's a lot to be done in that area."