SEC’s Regulation Crypto Assets Provides Major Step Toward Clarity

Key Points

• This is the most significant step the SEC has taken toward providing clarity to its regulation of crypto assets. The proposal thoughtfully draws clear lines in many areas, often taking out the guesswork of whether something may be a crypto asset security.
• It would provide a path for small startups, U.S.-based issuers conducting offerings of up to $20 million or $75 million over a single year, and issuers planning to relinquish control over their projects. Large projects and tokenized equities offerings likely would not qualify for a proposed exemption.
• While the rule generally does a good job of avoiding the regulatory ambiguity that has kept many on the sidelines, there are a few principles-based concepts that could introduce areas of uncertainty, such as the disclosure requirements for the startup exemption.
• The proposed rules further the current SEC’s goal of democratization by making exempt offerings available to retail investors. Anyone could purchase securities offered under the startup exemption. Under the fundraising exemption, non-accredited investors could invest up to 10% of the greater of their annual income or net worth.

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Introduction / Background

On August 18, 2026, the U.S. Securities and Exchange Commission (SEC) released its proposed rules for investment contracts involving crypto assets, titled “Regulation Crypto Assets.” This follows joint SEC and Commodity Futures Trading Commission (CFTC) guidance from March on token taxonomy and how the federal securities laws apply to crypto assets,¹ and the recently stalled efforts by Congress to pass the CLARITY Act.