The U.S. Securities and Exchange Commission (SEC) is moving to establish a separate securities regulatory framework for certain crypto asset businesses. The proposal is intended to create clearer fundraising paths for crypto issuers while preserving federal investor protections.

SEC proposes two crypto fundraising exemptions

Under the SEC’s proposed Regulation Crypto Assets, certain offerings involving crypto assets would qualify for two exemptions from registration requirements under the Securities Act of 1933.

The first exemption would allow an eligible issuer to raise up to $5 million over a four-year period. The second would permit up to $75 million in total offerings within any 12-month period. The larger exemption would come with additional obligations, including periodic reporting and disclosure in financial statements.

The proposed caps echo the ceilings of established non-crypto fundraising channels for smaller issuers: Regulation Crowdfunding, limited to $5 million in a 12-month period, and Regulation A+ Tier 2, which the SEC raised to $75 million per 12-month period in 2024.

Both exemptions would require principal-based narrative disclosures for investors.

The SEC said the framework would apply to certain investment contracts tied to crypto assets, rather than the digital asset sector as a whole.

New safe harbor targets crypto “investment contracts”

A central part of the proposal is a conditional safe harbor that would define the meaning of “investment contract” under the Securities Act and Exchange Act.

Neither statute defines the term. Since the Supreme Court’s 1946 decision in SEC v. W.J. Howey Co., courts have asked whether an investment of money is made in a common enterprise with a reasonable expectation of profits derived from the efforts of others — the framework through which many token offerings have been analyzed case by case.

If an issuer meets the proposed conditions, the related crypto asset would no longer be treated as the subject of an investment contract under the relevant securities definitions.

The proposal also seeks to address certain state securities registration and qualification requirements in advance for securities issued under Regulation Crypto Assets. State-level rules, commonly called blue sky laws, have traditionally applied alongside federal requirements. The proposed preemption would also extend to some secondary-market transactions.

SEC Chairman Paul Atkins said the framework would give crypto entrepreneurs clearer paths to raise capital and encourage innovation within the United States. Atkins previously served as an SEC commissioner from 2002 to 2008 and returned to lead the agency as chairman in 2025.

The proposal follows the SEC’s March 2026 interpretation on the application of federal securities laws to certain crypto assets and transactions. Together, the efforts are meant to provide a clearer regulatory roadmap for U.S.-based crypto companies.

SEC says proposal is designed to keep crypto innovation in the U.S.

The SEC said the proposed rules could reduce the incentive for crypto issuers to relocate overseas.

The agency also said the plan is designed to expand investment opportunities while maintaining investor protections. The proposal could be significant for crypto companies, as token-based fundraising has often faced uncertainty over when securities laws apply.

Regulation Crypto Assets is still only a proposal and is not yet final. The SEC will accept public comments for 60 days after the proposing release is published in the Federal Register. Once the comment window closes, the agency will review submissions and vote on whether to adopt final rules, which can differ from the proposal; no adoption date has been set.

The proposed exemptions and safe harbor therefore do not yet provide legal protection for crypto issuers or projects.