SEC Proposes Crypto Offering Exemptions and Conditional Safe Harbor

The Securities and Exchange Commission has proposed a crypto-specific securities-offering framework that would give certain token projects new, defined routes to raise capital while setting conditions for when a related investment contract could cease to exist. The Aug. 18 proposal, called Regulation Crypto Assets, is not yet law, but it would mark a significant change in how the agency approaches offerings involving crypto assets if adopted.

The package combines two proposed exemptions from Securities Act registration, principles-based disclosure requirements, ongoing reporting for the larger fundraising route and a conditional safe harbor tied to investment-contract status. In its announcement, the SEC said the initiative is designed for certain investment contracts involving crypto assets—not for every crypto asset, trading venue or transaction in the market.

Two proposed routes to raise capital

The smaller exemption would permit a one-time startup offering of up to $5 million over four years. The SEC has described the second, larger exemption as allowing offerings of as much as $75 million during a 12-month period. Both routes would require narrative disclosures built around stated principles rather than a wholly standardized checklist, according to the agency.