The Securities and Exchange Commission has proposed a crypto-specific securities-offering framework that would give certain token projects new, defined routes to raise capital while setting conditions for when a related investment contract could cease to exist. The Aug. 18 proposal, called Regulation Crypto Assets, is not yet law, but it would mark a significant change in how the agency approaches offerings involving crypto assets if adopted.
The package combines two proposed exemptions from Securities Act registration, principles-based disclosure requirements, ongoing reporting for the larger fundraising route and a conditional safe harbor tied to investment-contract status. In its announcement, the SEC said the initiative is designed for certain investment contracts involving crypto assets—not for every crypto asset, trading venue or transaction in the market.
Two proposed routes to raise capital
The smaller exemption would permit a one-time startup offering of up to $5 million over four years. The SEC has described the second, larger exemption as allowing offerings of as much as $75 million during a 12-month period. Both routes would require narrative disclosures built around stated principles rather than a wholly standardized checklist, according to the agency.
The $75 million ceiling is clear in the SEC’s high-level description. The detailed architecture beneath it is less settled in public accounts. Analyses by Skadden and Thompson Coburn describe a two-tier version of the fundraising exemption: Tier 1 offerings up to $20 million and Tier 2 offerings up to $75 million in a 12-month period. The SEC press release does not spell out those tiers, so issuers and advisers will need to rely on the eventual proposing release and, later, any final rule for the controlling terms.
That difference is more than a drafting detail. A $5 million startup route is structured as a four-year, one-time exemption, whereas the larger route is measured annually and carries financial-statement and continuing-reporting obligations, the SEC said. The framework would therefore offer more explicit proposed compliance paths for qualifying issuers, but not a blanket escape from federal securities regulation.
The safe harbor addresses the investment contract, not every token
The most consequential legal element may be the proposed safe harbor. It addresses circumstances in which a covered investment contract involving a crypto asset could be treated as having ceased to exist once the issuer has completed—or permanently stopped—its promised essential managerial efforts. If its conditions are met, the SEC says the crypto asset would be deemed not subject to an investment contract for purposes of the Securities Act and Exchange Act definitions of a security.
The formulation draws an important boundary. The proposal does not say that a crypto asset automatically loses any possible securities-law relevance after time passes or after it changes hands. Rather, it proposes a conditional treatment for the investment-contract relationship through which an asset was offered. Commissioner Hester M. Peirce, whose statement on the proposal supported moving the rulemaking forward, described it as a step toward rules for crypto offerings that can be clear and enforceable.
The SEC has not said the safe harbor would eliminate its antifraud or antimanipulation authority. Those federal provisions would continue to apply under the proposal. Nor would the framework broadly displace state law: the agency’s stated preemption is limited to state securities registration and qualification requirements for securities issued under the proposed exemptions and for certain secondary-market transactions.
A rulemaking built on this year’s policy shift
Regulation Crypto Assets follows a March SEC-CFTC interpretation concerning the application of federal securities laws to certain crypto assets and transactions. The proposal is listed as File No. S7-2026-27 on the SEC’s rulemaking activity page, underscoring that it has entered the formal rulemaking pipeline rather than merely reflecting staff guidance or an enforcement position.
That sequence helps explain the SEC’s approach. The March interpretation addressed the application of existing law in certain circumstances; the August proposal would add tailored offering exemptions and a specified mechanism for addressing the end of an investment contract. The latter is an attempt to set prospective transaction rules, subject to notice and comment, instead of leaving issuers to infer all outcomes from individual enforcement cases and litigation.
Public comments will be due 60 days after the proposing release appears in the Federal Register. Some legal analyses have cited a calendar deadline, but the SEC’s own announcement states the deadline in relation to Federal Register publication, and no fixed date is necessary to understand the current procedural posture. Comments could alter the exemptions, disclosure obligations, safe-harbor conditions or state-law treatment before any final Commission vote.
For the market, the proposal’s immediate value is definitional rather than operational: it puts concrete dollar limits, reporting obligations and a proposed legal off-ramp into a single framework. Whether those provisions become dependable capital-raising tools will depend on the final text—and on how issuers, investors and state regulators respond during the comment process.