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Points of Focus
- The SEC proposed a $75-million annual fundraising exemption for crypto tokens.
- A new safe harbor lets tokens exit securities law once managerial effort ends.
- The rule builds on the SEC’s March 2026 crypto asset interpretation.
The US Securities and Exchange Commission (SEC) proposed Regulation Crypto Assets on Aug. 18, creating two new capital-raising exemptions and a conditional safe harbor for crypto token issuers.
This proposal follows the Commission’s March 2026 interpretation clarifying how the federal securities laws apply to certain crypto assets and transactions involving crypto assets.https://t.co/FwP5yYScRT
— U.S. Securities and Exchange Commission (@SECGov) August 18, 2026
The rule follows the SEC’s March 2026 interpretive release clarifying which crypto assets count as securities and aims to “reduce incentives for issuers to create and operate offshore.” The proposal arrived several days after the commission canceled a scheduled Aug. 14 vote on the same rule.
The exemptions are tiered by scale. A “startup exemption” allows offerings up to $5 million over a four-year period, aimed at early-stage projects. A “fundraising exemption,” modeled in part on Regulation A, allows up to $20 million under a lighter Tier 1 disclosure standard and up to $75 million under a more detailed Tier 2 standard, each within a 12-month period, according to the SEC’s fact sheet.
A safe harbor lets tokens leave securities law once managerial work ends
The more structurally significant piece is the proposal’s investment contract safe harbor. Under it, an issuer can certify to the commission that it has “completed or otherwise permanently ceased all essential managerial efforts” it promised investors under an investment contract, at which point the SEC would no longer treat the underlying crypto asset as subject to its authority.
The proposal’s more structurally significant piece is its investment contract safe harbor.
“Under this safe harbor, if the issuer certifies to the Commission that it has ceased or terminated all essential managerial efforts that it promised to undertake under the investment contract and satisfies certain other conditions, then the Commission would no longer deem the non-security crypto asset to be subject to an investment contract and, therefore, no longer subject to the authority of the Commission,” SEC Chair Paul Atkins said in his statement.
Atkins credited the mechanism to Commissioner Hester Peirce’s February 2020 speech, “Running on Empty,” which first proposed a safe harbor to bridge the gap between securities regulation and network decentralization. “She has long championed the concepts of this proposal through her safe harbor proposal, and today’s action is a fulfillment of her original idea,” Atkins said.
Peirce, in her statement, positioned the rule as one component of a broader initiative rather than a substitute for congressional action, noting it followed extensive input from the Crypto Task Force she leads. She also invited public comment on a specific unresolved question: whether crypto assets can be structured to “serve a role akin to equity” so that tokenholders can share in an enterprise’s growth, an open design question the current proposal does not yet answer.
The rule advances, while the CLARITY Act waits on the Senate
Atkins positioned the rule as complementary to, not a replacement for, statutory reform, saying the SEC is acting “as Congress works to establish a lasting regulatory framework.”
This understates the practical gap: The CLARITY Act’s Senate floor vote has slipped past its earlier target, leaving no confirmed timeline, while Regulation Crypto Assets now offers issuers a working exemption path through rulemaking alone, pending a 60-day public comment period following Federal Register publication.
The proposal also builds directly on the SEC and the Commodity Futures Trading Commission’s joint March 2026 token taxonomy, which established four non-security crypto categories — digital commodities, collectibles, tools, and payment stablecoins — alongside a fifth category, tokenized traditional securities, that remains squarely regulated.
Regulation Crypto Assets extends that taxonomy into binding exemption thresholds and an exit mechanism, moving the SEC’s crypto framework from interpretive guidance toward enforceable rule text for the first time.
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