SEC’s $75 million crypto fundraising plan faces bank backlash and threats of legal action

US banks warned that proposed SEC crypto exemptions could drain deposits as investment managers pushed for broader access to digital assets.The competing demands emerged as the Securities and Exchange Commission's (SEC) Oct. 20 comment deadline for its proposed Regulation Crypto Assets expired, exposing divisions over how far regulators should go in easing restrictions on cryptocurrency fundraising and investment.The proposal, published Aug. 21, would allow qualifying crypto projects to raise up to $5 million over four years or $75 million annually without registering their investment-contract offerings under the Securities Act. Issuers would remain subject to disclosure requirements and federal antifraud provisions.It would also establish a conditional safe harbor allowing crypto assets to cease being subject to investment contracts once issuers complete or permanently abandon promised essential managerial work and file a transition report with the SEC.Submissions from Bitwise, Nasdaq, the Alternative Investment Management Association, community banks and investor advocates reveal competing priorities that could shape the final regulations.Wall Street and crypto firms push for bro...