SEC Proposes ‘Regulation Crypto Assets,’ Creating Tailored Crypto Offering Exemptions and Investment Contract Safe Harbor

On Aug. 18, 2026, the U.S. Securities and Exchange Commission (SEC or Commission) issued a 402-page proposing release for Regulation Crypto Assets (Proposed Rules), which would establish a standalone offering framework for certain investment contracts involving crypto assets. The proposal is the SEC’s first formal effort to create an offering regime specifically tailored to covered investment contracts involving crypto assets. Until now, market participants have largely relied on previously issued no-action letters, interpretative releases, and written staff guidance relating to these assets to address crypto-related concerns under frameworks developed for traditional securities.

The Proposed Rules would establish two new exemptions from registration under the Securities Act of 1933, as amended (Securities Act) – a startup exemption and a larger fundraising exemption – together with crypto-specific disclosure requirements, a conditional investment contract safe harbor, and federal preemption of state securities registration and qualification requirements for offerings under Regulation Crypto Assets and certain secondary market transactions.

The Proposed Rules are the rulemaking follow-through to regulatory developments earlier this year (see our March 2026 GT Alert). On March 17, 2026, the SEC issued an interpretive release (March Release) addressing how the SEC v. W.J. Howey Co. investment contract analysis applies to crypto assets and how a non-security crypto asset may cease to be subject to an investment contract, in addition to establishing a taxonomy of various crypto assets that were deemed not to be securities. The Commodity Futures Trading Commission (CFTC) joined that interpretation. On the same day, SEC Chairman Paul S. Atkins previewed a potential framework called “Regulation Crypto Assets,” including startup and fundraising exemptions and an investment contract safe harbor. At the time, those concepts had not been formally proposed and remained conceptual and non-binding.