SEC proposes Regulation Crypto Assets framework with new exemptions

The Securities and Exchange Commission proposed Regulation Crypto Assets on August 18, 2026, creating the first purpose-built framework for crypto asset offerings under federal securities law. The proposal introduces two registration exemptions and a conditional safe harbor designed to clarify pathways for blockchain technology companies to raise capital while maintaining investor protections.

The first exemption, a startup exemption, would permit offerings of up to $5 million during a four-year period on a one-time basis. The second exemption would allow offerings of up to $75 million during each 12-month period, subject to stricter requirements including financial statement filings and ongoing reporting obligations. Both exemptions require issuers to provide principles-based narrative disclosures covering ten topic areas, including investment contract terms and offering details.

The proposed rules also include a conditional safe harbor from the definition of “investment contract,” a key securities law term. If an issuer completes or permanently ceases all essential managerial efforts it represented or promised it would undertake, the crypto asset would no longer be subject to investment contract classification. This provision addresses a long-standing issue in the industry, where tokens have remained subject to securities regulation even after projects became fully decentralized.