Regulation Crypto Assets: SEC Proposes Bespoke Offering Regime for Certain Crypto Assets

Seeking to establish a new framework for offerings of investment contracts involving crypto assets, the US Securities and Exchange Commission’s proposed Regulation Crypto Assets would, if adopted, establish two new exemptions from the registration requirements of Section 5 under the Securities Act; a safe harbor from being deemed an investment contract under the Securities Act and Exchange Act; and a definition of “qualified purchaser” under the Securities Act that would preempt state securities law registration and qualification with respect to offers and sales of covered investment contracts conducted pursuant to a Regulation Crypto Assets exemption.

Positioned as the SEC’s effort to support capital formation and innovation in the crypto markets while maintaining appropriate investor protections, Regulation Crypto Assets may bring welcome clarity to many stakeholders, including innovators and developers who seek to raise capital through the offer and sale investment contracts involving crypto assets for crypto-related projects, while broader legislative efforts in Congress remain delayed.

A NEW FRAMEWORK FOR COVERED INVESTMENT CONTRACTS

Proposed on August 18, Regulation Crypto Assets builds on the SEC’s March 2026 interpretative release regarding the application of the federal securities laws to certain crypto assets by creating a regulatory framework for transactions in which a non-security crypto asset is offered or distributed as part of an investment contract.[1]