The U.S. Securities and Exchange Commission (SEC) proposed Regulation Crypto Assets on August 18, creating new fundraising exemptions for certain crypto investment contracts. The proposal would allow some issuers to raise up to $5 million over four years, or up to $75 million annually, without registration. Alongside the exemptions, the SEC proposed a conditional safe harbor and the preemption of state registration requirements.

SEC Sets Two Fundraising Exemptions

According to the SEC, the first exemption would permit one offering of up to $5 million during a four-year period. The second would allow offerings of up to $75 million during each 12-month period.

Issuers relying on either exemption would need to provide principles-based narrative disclosures. Those using the $75 million exemption would also be required to provide financial statements and ongoing reports. The two-tier structure follows the pattern of the SEC's existing exemption regimes, where obligations scale with offering size: the $75 million ceiling mirrors the annual cap available under Regulation A+, an established pathway that likewise pairs larger raises with financial-statement and ongoing-reporting requirements.

The proposal builds on the SEC's March 2026 interpretation covering federal securities laws and certain crypto assets. Chairman Paul S. Atkins said the framework seeks clearer paths for crypto entrepreneurs raising capital under federal securities laws. The rulemaking push has characterized the agency's crypto agenda since Atkins became chairman in 2025, following a period in which the SEC relied primarily on enforcement actions to police token offerings.

Safe Harbor Targets Crypto Investment Contracts

The SEC also proposed a conditional safe harbor for certain crypto assets. If issuers satisfy its conditions, their assets would not qualify as investment contracts under the Securities Act and Exchange Act definitions. Investment contract is the statutory category at the center of the long-running dispute over whether digital assets are securities, a question courts have assessed using the test from the Supreme Court's 1946 SEC v. W.J. Howey Co. decision.

The proposal further addresses state requirements, preempting state securities registration and qualification rules for offerings made under the Regulation Crypto Assets exemptions. Such preemption has federal precedent: the National Securities Markets Improvement Act of 1996 already bars states from imposing registration requirements on offerings covered by certain federal exemptions.

Under the plan, issuers would provide principles-based disclosures covering information investors need about qualifying projects. The supplied material identifies source code, structure, tokenomics, roadmaps, and core teams among the topics covered.

SEC Opens 60-Day Comment Period

The public can submit comments for 60 days after the proposal appears in the Federal Register. The SEC said the rules aim to clarify when crypto assets fall under federal securities laws. As with any SEC proposal, Regulation Crypto Assets would take effect only if the Commission votes to adopt final rules after reviewing the comments it receives.

The proposal also includes anti-fraud and anti-manipulation provisions. Projects seeking the proposed safe harbor would face decentralization benchmarks, including independent governance and distributed nodes. In addition, the framework identifies token market independence as a benchmark. Under the supplied material, that means token value would depend on utility rather than centralized marketing.

SEC Commissioner Hester Peirce said rules should allow well-intentioned people to follow them without abandoning legitimate pursuits. Peirce has championed a token safe harbor since first proposing one in 2020 and has issued updated versions since, work she has continued through the crypto task force she leads at the agency.