The Securities and Exchange Commission proposed Regulation Crypto Assets on Aug. 18, a framework that would let token issuers raise up to $75 million a year without registering the offering and, under a separate safe harbor, remove some tokens from the definition of a security altogether.
The proposal answers the question at the center of a decade of SEC crypto enforcement: when a token stops being a security. It arrives with the Digital Asset Market Clarity Act still short of a floor vote, making the rulemaking the more advanced of the two tracks.
Two Exemptions, One Ceiling
The proposing release sets out a startup exemption covering up to $5 million raised over as long as four years, with public filings at the start and end of the period, and a fundraising exemption split into two tiers: $20 million and $75 million of covered investment contracts per 12-month period. Tier 2 issuers must file audited financial statements and take on ongoing reporting obligations modeled on Regulation A. Both exemptions require principles-based narrative disclosures and leave issuers subject to the antifraud and antimanipulation provisions of the securities laws.
“Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws,” SEC Chairman Paul Atkins said in a statement.
Ceased Managerial Efforts
The safe harbor applies once an issuer has completed or permanently ceased all essential managerial efforts it promised under the investment contract, makes no new representations about such efforts, and files a public certification with supporting analysis. The token would then be deemed not to constitute an investment contract. The condition builds on the Commission's March guidance on how securities laws apply to crypto assets.
State registration requirements would be preempted for primary offerings made under the regulation, and for secondary transactions by non-issuers as long as the issuer keeps meeting the federal requirements.
A Vote That Vanished
The Commission cancelled the Aug. 14 open meeting scheduled to consider the rules, four days before publishing them. The release is numbered 33-11434 under file S7-2026-27, with comments due 60 days after Federal Register publication.
Bitcoin traded at $64,138, up 0.8% on the day, according to CoinGecko. Total crypto market capitalization stood at $2.29 trillion.