On August 18, 2026, the Securities and Exchange Commission (the SEC or the Commission) proposed a new rule, titled “Regulation Crypto Assets,” that would create a tailored securities offering regime for certain investment contracts involving crypto assets (the Proposal). The Proposal is the SEC’s first attempt at formal crypto rulemaking, following the Commission’s March 2026 interpretation clarifying how the federal securities laws apply to certain crypto assets and transactions involving crypto assets.

Together, the two efforts are meant to address “long-standing barriers to responsible capital formation and innovation within domestic crypto asset markets, while preserving the investor protections at the core of federal securities laws.” Below, we walk through what the Proposal does, what it does not yet do, and what token issuers and market participants should be watching as the comment period unfolds.

Background: From Interpretation to Rulemkaing

The Proposal builds directly on the interpretive release the Commission issued on March 17, 2026, which established a token taxonomy distinguishing between digital commodities, digital collectibles, digital tools, payment stablecoins, and digital securities. That release explained how a non-security crypto asset can become subject to an investment contract, and, importantly, how it can cease to be subject to one.

In his statement accompanying the Proposal, Chairman Paul Atkins was blunt about the shortcomings of the prior regime, describing it as “regulation by enforcement and disingenuous offers to ‘come in and register’” that forced issuers into a “square peg in a round hole” approach under rules “which were not adopted with these assets in mind, and many of which originated in the 1930s.” Chairman Atkins previewed the architecture for the Proposal in a March 17 speech, describing a “startup exemption,” a “fundraising exemption,” and an “investment contract safe harbor” as the three pillars of a future rulemaking. Five months later, that blueprint has become an actual proposed rule.

What the Proposal Would Do

Regulation Crypto Assets includes two new exemptions from the registration requirements of the Securities Act of 1933, each tailored to investment contracts involving crypto assets:

• A startup exemption, which would permit a “one-time exemption that would permit offerings of up to $5 million during a four-year period.”
• A fundraising exemption, which would “permit offerings of up to $75 million during each 12-month period.”

Under both exemptions, issuers would need to make certain principles-based narrative disclosures available to investors. Issuers relying on the larger, $75 million exemption would face heavier obligations: they would be required to provide financial statements and would be subject to ongoing reporting requirements. Commissioner Hester Peirce’s accompanying statement confirmed that the antifraud and antimanipulation provisions of the federal securities laws would continue to apply in full under either exemption.

The Proposal also includes a conditional safe harbor from the term “investment contract” in the definitions of “security” under both the Securities Act of 1933 and the Securities Exchange Act of 1934. If an issuer satisfies the safe harbor’s conditions, the associated crypto asset would no longer be treated as the subject of an investment contract for purposes of those definitions. According to Chairman Atkins, that safe harbor would become available “once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract”—language that tracks the decentralization concept the Commission first laid out in its March interpretation.

Notably, the Proposal would also preempt state securities law registration and qualification requirements for offers and sales made under a Regulation Crypto Assets exemption, as well as for certain secondary market transactions in those assets.

Why It Matters

For years, the SEC’s approach to crypto assets was defined largely by enforcement rather than rulemaking. Chairman Atkins framed the action as a deliberate shift away from that posture, stating that the Proposal is meant to “provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws.” More pointedly, he described the Proposal as “common-sense regulation: minimum effective dose, maximum freedom to build, and durable clarity under existing law,” adding that the Commission is “charting a road to invite innovators back to the United States.” He further described it as a way to “onshore innovation in crypto asset markets for generations to come,” language that echoes the Commission’s stated goal of reducing incentives for issuers to build offshore.

Commissioner Peirce, a longtime advocate for a crypto safe harbor dating back to her 2020 “Token Safe Harbor” proposal, was similarly direct about the stakes, describing the Proposal as “an important step toward putting clear, sensible, enforceable rules in place for crypto offerings.” At the same time, she was candid that the framework is a starting point rather than a finished product, noting that the “exemptions and safe harbor we are proposing today will not fit every model” and inviting feedback on how crypto assets might one day “serve a role akin to equity.”

What Happens Next

This is a proposed rule, not a final one. The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register, and the substantive numbers, thresholds, and conditions described above could still change before any final rule is adopted. Token issuers, funds, and other market participants who are structuring or planning crypto asset offerings should review the full text of the Proposal and the accompanying Fact Sheet. They may also want to consider submitting comments, particularly given the SEC’s evident interest in feedback on some of the harder-edged design questions, including how the $5 million and $75 million thresholds interact with other exemptions, and how the decentralization test for the safe harbor will be administered in practice.

We will continue to track Regulation Crypto Assets as it moves through the comment process and will provide updates on this blog as the rulemaking develops.