SEC Proposes Tailored Offering Regime for Crypto Assets

In Short

The Situation: On August 18, 2026, the Securities and Exchange Commission (the "SEC") proposed "Regulation Crypto Assets" (the "Regulation") to provide exemptions from registration under the Securities Act of 1933 (the "Securities Act") for offerings of "covered investment contracts" involving crypto assets. The Regulation also provides a conditional safe harbor from the definition of "investment contract," which applies across the use of "investment contract" in existing securities rules and regulations.

The Change: The Regulation would permit (i) initial "startup" offerings of up to $5 million over four years and (ii) larger "fundraising" offerings of up to $75 million per 12-month period, provided that issuers make certain principles-based disclosures. The Regulation also would establish a mechanism for crypto assets to transition out of securities law obligations once issuers complete or permanently cease their essential managerial efforts.

Looking Ahead: Once finalized, the Regulation would be the most significant securities regulation for crypto assets in the United States to date and could facilitate more capital formation and innovation. Although the current proposal of the Regulation aligns with draft provisions of market structure legislation, SEC Chairman Paul Atkins has recognized that legislation would still be needed to cement a reliable regulatory framework into law.