The U.S. Securities and Exchange Commission has proposed Regulation Crypto Assets, a new framework intended to give certain crypto projects clearer rules for raising capital while keeping them within the protections of federal securities law.

Released on August 18, the proposal would establish two exemptions from securities registration for certain investment contracts involving crypto assets. It also contains a conditional safe harbor that could allow some crypto assets to move outside the federal securities framework once specified conditions are satisfied.

The proposal addresses a long-standing gap. Until now, whether a token sale involved a securities offering was assessed largely case by case under the Supreme Court’s 1946 Howey decision and, in practice, through SEC enforcement, leaving issuers without a registration-exemption pathway written specifically for crypto assets.

What Regulation Crypto Assets would change

The proposal centers on what the SEC calls “covered investment contracts.” These involve a crypto asset that is not itself a security but is initially tied to an investment contract based on the issuer’s promised managerial efforts.

The first exemption would permit eligible issuers to raise up to $5 million over a four-year period. The second would allow offerings of as much as $75 million during any 12-month period. Both paths would require investor disclosures, and the larger exemption would additionally require financial statements and continuing reports. The thresholds mirror ceilings the SEC already applies in other retail capital-raising regimes: Regulation A Tier 2 caps offerings at $75 million in a 12-month period, and Regulation Crowdfunding limits raises to $5 million. Crypto issuers have occasionally used those routes — Blockstack’s 2019 token offering was the first qualified under Regulation A+ — but only a handful have done so, and the new exemption terms are written specifically around covered investment contracts.

Investor-protection requirements would remain in place. Issuers relying on the exemptions would still be subject to federal antifraud and antimanipulation provisions.

Why the safe harbor matters

Among the proposal’s most significant features is its conditional safe harbor. If an issuer fulfills the essential managerial commitments that originally caused the investment contract to exist, that contract could eventually cease to qualify as an investment contract.

As a result, the underlying crypto asset could fall outside the federal securities definition, subject to the proposal’s conditions and required SEC filings. The framework therefore creates a potential route from early-stage fundraising toward a functioning crypto network or application.

The SEC’s action follows its March 2026 interpretation clarifying how federal securities laws apply to certain crypto assets and transactions.

Regulation Crypto Assets remains a proposal rather than final law. The SEC has opened a 60-day public comment period following Federal Register publication, and the framework’s ultimate impact will depend on the final rules — including the precise conditions issuers must satisfy under the safe harbor — and on how Congress’s broader crypto legislation develops.