SEC Proposes 'Regulation Crypto Assets' to Civilize Wild Token Offerings
Published Date: 8/21/2026
Proposed Rule
Summary
The Securities and Exchange Commission ("Commission") is proposing new rules to create a tailored offering regime for certain investment contracts involving crypto assets. The proposed offering regime is intended to facilitate capital formation and accommodate innovation within the crypto asset markets while, at the same time, ensuring that investors are adequately protected and provided with the information they need to make informed investment decisions. The proposed rules would be set forth in a new regulation titled "Regulation Crypto Assets" and would include two exemptions from the registration requirements of section 5 of the Securities Act of 1933. The first exemption would permit offerings of up to $5 million during a four-year period. The second exemption would permit offerings of up to $75 million during each 12-month period. Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. In addition, issuers under the second exemption would be required to provide financial statements and would be subject to ongoing reporting requirements. Issuers that rely on these exemptions would remain subject to the antifraud and antimanipulation provisions of the Federal securities laws. The proposed rules also would include a conditional safe harbor from the term "investment contract" in the definitions of "security" in the Securities Act of 1933 and the Securities Exchange Act of 1934. If the conditions of that proposed safe harbor are satisfied, then a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions of "security."
Analyzed Economic Effects
9 provisions identified: 7 benefits, 1 costs, 1 mixed.
Fundraising exemption: up to $75M per year
The proposed "fundraising exemption" would permit offerings of up to $75,000,000 during each 12-month period for covered crypto investment contracts. Issuers relying on this exemption must provide principles-based narrative disclosures, supply financial statements, comply with ongoing reporting requirements, and remain subject to federal antifraud and antimanipulation laws.
Conditional safe harbor from investment contract
The proposal would create a conditional safe harbor so that, if an eligible crypto asset meets certain conditions, it would be treated as not being an "investment contract" for purposes of the Securities Act and the Exchange Act. If the conditions are met, that crypto asset would be deemed not subject to an investment-contract characterization under those statutes.
Startup exemption: up to $5M over 4 years
If you are issuing covered crypto investment contracts as a startup, the proposed "startup exemption" would let you offer up to $5,000,000 during a four-year period. Issuers using this exemption must make certain principles-based narrative disclosures available to investors and remain subject to federal antifraud and antimanipulation laws.
Principles-based disclosures required
Under both the $5 million and $75 million exemptions, issuers must make certain principles-based narrative disclosures available to their investors. These disclosures are intended to give investors the information they need to make informed investment decisions about covered crypto investment contracts.
Fundraising exemption: financials and reporting
Issuers that rely on the $75,000,000 exemption must provide financial statements and are subject to ongoing reporting requirements under the proposed rules. That will increase public disclosures and create additional compliance and recordkeeping obligations for those issuers.
Antifraud and antimanipulation still apply
Even if an issuer uses one of the new exemptions, the issuer would remain subject to the antifraud and antimanipulation provisions of the federal securities laws when offering covered crypto investment contracts. That means issuers can still be held liable for fraudulent or manipulative conduct.
Definitions for crypto assets and covered contracts
The proposal defines "crypto asset" as any digital representation of value recorded on a cryptographically-secured distributed ledger, and defines "covered investment contract" as an investment contract in which a crypto asset is subject, the crypto asset is not itself a security, and no other asset is subject. These definitions determine what transactions fall within the new regime.
Preemption of state registration requirements
The proposed Regulation Crypto Assets includes a proposal (see Subpart E, Rule 500) to preempt state registration and qualification requirements for offerings made to a defined class of "qualified purchasers." This could reduce duplicative state filings for issuers relying on the federal exemptions.
Inflation adjustment for offering limits
The proposed rules include an inflation adjustment for the offering limits (see Rule 102), meaning the $5,000,000 and $75,000,000 caps could be adjusted over time to reflect inflation. This keeps the real value of those dollar limits from eroding as prices change.
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Key Dates
Department and Agencies
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