Key Takeaways:
- The SEC has proposed Regulation Crypto Assets in a framework for certain crypto investment contracts.
- Up to $5m or $75m in funding for each issuer would be available under specific exemptions.
- Certain crypto assets might also be eligible for a new conditional safe harbor to exempt them from security investment contract classification.
The U.S. Securities and Exchange Commission (SEC) is taking steps to create a separate securities regulation regime for specific crypto asset businesses. The proposal would provide better avenues for capital-raising for issuers of cryptocurrencies while retaining federal investor protections.
SEC Proposes Two Crypto Fundraising Exemptions
The SEC’s proposed Regulation Crypto Assets introduces two exemptions from registration requirements under the Securities Act of 1933. The first would allow an eligible issuer to conduct offerings of up to $5 million over a four-year period.
The second would allow up to $75 million in total offerings in any 12-month period. A larger exemption would come with extra obligations such as periodic reporting and disclosure of information in the financial statements.
Both exemptions would mandate investors with principals-based narrative disclosures.
The SEC stated that the framework is to be implemented in relation to some investment contracts in relation to crypto assets and not the entire digital asset sector.
Read More: SEC Eyes Tokenized Stocks Plan That Could Unlock Trillions in Crypto Trading Markets
New Safe Harbor Targets Crypto “Investment Contracts”
Conditions Could Change How Some Tokens Are Classified
A key component of the proposal is a conditional safe harbor for defining the meaning of “investment contract” under the Securities Act and Exchange Act.
Where an issuer meets the conditions proposed, the corresponding crypto asset will no longer be classified as the subject of an investment contract under the various definitions of securities.
The project also aims to address some of the state requirements for securities registration and qualification for securities issued under Regulation Crypto Assets in advance. The proposed preemption would also cover some secondary-market transactions.
The framework would provide crypto entrepreneurs with clearer paths to raise capital and encourage innovation within the United States, said SEC Chairman Paul Atkins.
The proposal mirrors the March 2026 interpretation by the SEC on the applicability of federal securities regulations to some crypto assets and transactions. The efforts collectively are designed to offer a clearer regulatory roadmap for crypto companies based in the U.S.
SEC Seeks to Keep Crypto Innovation in the U.S.
The proposed rules might create a disincentive for crypto issuers to relocate overseas, the SEC said.
The agency also proposed to base the plan on opening up investment opportunities while remaining constant to investor protections. It may make a difference for crypto companies as raising capital by issuing tokens have frequently been in limbo as to when securities regulations would be in effect.
Regulation Crypto Assets is not a final regulation but a proposal. The SEC will accept public comments for 60 days after the proposing release is published in the Federal Register.
So that the proposed exemptions and safe harbor are not new legal safeguards for crypto issuers and projects.
Read More: SEC Delays Solana ETF Decision to October 16 After Final 60-Day Review Extension
