The U.S. Securities and Exchange Commission issued a 402-page proposing release on August 18, 2026, for a new framework called Regulation Crypto Assets.
The proposal represents 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 no-action letters, interpretative releases, and written staff guidance to address crypto-related concerns under frameworks designed for traditional securities.
The Proposed Rules would establish two new exemptions from registration under the Securities Act of 1933, along with crypto-specific disclosure requirements and a conditional investment contract safe harbor.
SEC Chairman Paul S. Atkins previewed the potential framework on March 17, 2026, including startup and fundraising exemptions and an investment contract safe harbor, though those concepts remained conceptual and non-binding at the time.
Five months later, the Commission has translated that framework into formally proposed rules covering the full lifecycle of certain crypto projects from initial fundraising through network development.
The startup exemption, set out in Proposed Rule 200, would cap aggregate offering proceeds at $5 million over a maximum period of four years from the filing of a new Form NOR.
Notably, the startup exemption would permit participation by non-accredited investors without imposing an individual investment cap and would allow general solicitation from the outset.
The fundraising exemption would accommodate significantly larger raises, with Tier 1 allowing up to $20 million and Tier 2 allowing up to $75 million in a 12-month period.
Unlike the startup exemption, the fundraising exemption would generally be available only to entities organised under U.S. federal, state, territorial, or District of Columbia law, with additional U.S. nexus requirements for officers, assets, and business administration.
Perhaps the most consequential element of the Proposed Rules is Rule 400, which would create a non-exclusive safe harbor from the term “investment contract” in the definitions of “security” under both the Securities Act and the Exchange Act.
Under Rule 400, a covered investment contract would be deemed to have ceased to exist once an issuer has completed or permanently ceased all essential managerial efforts it represented or promised to undertake, and has filed a Form TR with the SEC.
The proposing release states that once the safe harbor is satisfied, the Commission would take the position that applicable reporting, registration, and other federal securities law requirements no longer apply from that point forward.
The Commission acknowledges that some issuers may instead rely directly on the Howey analysis and the March Release, citing concern that invoking the safe harbor might be viewed as a tacit admission that an investment contract previously existed.
The proposal would also preempt state securities registration and qualification requirements for covered investment contracts, treating purchasers as “qualified purchasers” under Section 18(b)(3) of the Securities Act to facilitate secondary-market liquidity.
The Commission views this preemption as important to facilitating secondary-market liquidity and broader distribution of crypto assets, noting that state-by-state requirements may impede unrestricted secondary trading.
The Proposed Rules are now subject to a 60-day public comment period following publication in the Federal Register, after which the SEC will assess industry feedback.
The Commission also noted that an enacted CLARITY Act, if passed by Congress before the end of 2026 and signed into law, could inform any needed revisions to or clarifications of the Proposed Rules.