Plan
SEC Proposes "Regulation Crypto Assets" with Two Offering Exemptions and Investment Contract Safe Harbor
The Securities and Exchange Commission has proposed a tailored offering regime for crypto asset investment contracts, creating two registration exemptions and a conditional safe harbor from the definition of "security."
The Securities and Exchange Commission published a proposed rule on August 21, 2026, titled "Regulation Crypto Assets," which would establish a tailored offering regime for certain investment contracts involving crypto assets. The proposal, designated as economically significant and spanning 146 Federal Register pages, is intended, as the Commission states, to facilitate capital formation and accommodate innovation within the crypto asset markets while ensuring that investors are adequately protected and provided with the information they need to make informed investment decisions.
Two Exemptions from Securities Act Registration
The proposed regulation would create two exemptions from the registration requirements of section 5 of the Securities Act of 1933. The first, described as the "Startup Exemption," would permit offerings of up to $5 million during a four-year period. The second, the "Fundraising Exemption," would permit offerings of up to $75 million during each 12-month period. Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. Issuers relying on the Fundraising Exemption would face additional obligations: they would be required to provide financial statements and would be subject to ongoing reporting requirements. Regardless of which exemption an issuer relies upon, all issuers would remain subject to the antifraud and antimanipulation provisions of the federal securities laws.
Investment Contract Safe Harbor and State Preemption
Beyond the two offering exemptions, the proposed rules would include a conditional safe harbor from the term "investment contract" as it appears in the definitions of "security" in both the Securities Act of 1933 and the Securities Exchange Act of 1934. If the conditions of the proposed safe harbor are satisfied, a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions of "security." The proposed regulation would also address preemption of state registration and qualification requirements through a proposed definition of "qualified purchaser" set forth in Subpart E of the regulation.
Background and Regulatory Context
The Commission's document describes the regulatory history in two phases: the Commission's approach to crypto assets before 2025, and developments beginning in 2025, including written input provided to a Crypto Task Force on topics such as security status, scoping out, public offerings, and safe harbor from registration. The proposed rules would be codified across several parts of Title 17 of the Code of Federal Regulations, including 17 CFR 200, 201, 228, 230, 232, and 239. The term "crypto asset" under the proposed rules would be defined as any digital representation of value that is recorded on a cryptographically-secured distributed ledger, and the term "covered investment contract" would be defined as a contract, transaction, or scheme that constitutes an investment contract under that framework.
Economic Analysis
The Commission's proposal includes an economic analysis examining the current methods of raising up to $75 million in capital, affected issuers, disclosures currently provided by issuers of crypto asset-related offerings, and affected financial intermediaries. The analysis addresses the benefits and costs of each individual component of the proposed regulation — the Startup Exemption, the Fundraising Exemption, the Investment Contract Safe Harbor, and the preemption of state registration and qualification requirements — as well as the effects on efficiency, competition, and capital formation. The document also includes an Initial Regulatory Flexibility Act Analysis addressing small entities subject to the proposed rules.
What to Watch
The proposed rule was published in the Federal Register on August 21, 2026. Comments must be received on or before October 20, 2026.
Related
Sources
19 citedEvery hard fact above is grounded in and cited to a primary source record.
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The Securities and Exchange Commission published the proposed rule on August 21, 2026.
federalregister.gov -
The proposal is designated as economically significant.
federalregister.gov -
The proposal spans 146 Federal Register pages.
federalregister.gov -
The proposed regulation is titled 'Regulation Crypto Assets.'
federalregister.gov -
The proposed offering regime is intended to facilitate capital formation and accommodate innovation within the crypto asset markets while ensuring that investors are adequately protected and provided with the information they need to make informed investment decisions.
federalregister.gov -
The first exemption (Startup Exemption) would permit offerings of up to $5 million during a four-year period.
federalregister.gov -
The second exemption (Fundraising Exemption) would permit offerings of up to $75 million during each 12-month period.
federalregister.gov -
Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors.
federalregister.gov -
Issuers under the Fundraising Exemption would be required to provide financial statements and would be subject to ongoing reporting requirements.
federalregister.gov -
Issuers relying on either exemption would remain subject to the antifraud and antimanipulation provisions of the federal securities laws.
federalregister.gov -
The proposed rules would include a conditional safe harbor from the term 'investment contract' in the definitions of 'security' in the Securities Act of 1933 and the Securities Exchange Act of 1934.
federalregister.gov -
If the conditions of the proposed safe harbor are satisfied, a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions of 'security.'
federalregister.gov -
The proposed rules would be codified across 17 CFR 200, 17 CFR 201, 17 CFR 228, 17 CFR 230, 17 CFR 232, and 17 CFR 239.
federalregister.gov -
The term 'crypto asset' under the proposed rules would be defined as any digital representation of value that is recorded on a cryptographically-secured distributed ledger.
federalregister.gov -
Comments on the proposed rule must be received on or before October 20, 2026.
federalregister.gov -
The proposed regulation would address preemption of state registration and qualification requirements through a proposed definition of 'qualified purchaser' set forth in Subpart E.
federalregister.gov -
The Commission's document describes the regulatory history in two phases: the Commission's approach before 2025 and developments beginning in 2025.
federalregister.gov -
The Crypto Task Force received written input on topics including security status, scoping out, public offerings, and safe harbor from registration.
federalregister.gov -
The economic analysis examines current methods of raising up to $75 million in capital, affected issuers, disclosures provided by current issuers of crypto asset-related offerings, and affected financial intermediaries.
federalregister.gov