SEC Proposes ‘Regulation Crypto Assets’ to Streamline Capital Formation
The US regulator’s proposal aims to onshore innovation and clarify securities law application for digital assets, with a 60-day comment period now open.
The US Securities and Exchange Commission has proposed new rules titled “Regulation Crypto Assets,” establishing a tailored framework for certain investment contracts involving digital assets. The proposal seeks to provide clarity for market participants and facilitate responsible capital formation while maintaining core investor protections under federal securities laws.
SEC Chairman Paul S. Atkins stated that the initiative aligns with the Commission’s March 2026 interpretive guidance and concurrent legislative efforts by Congress. The goal is to address long-standing barriers to innovation within domestic crypto markets and reduce incentives for issuers to operate offshore, thereby expanding investment opportunities for US investors.
The proposed rules introduce two specific exemptions from the registration requirements of the Securities Act of 1933. The first offers a one-time exemption permitting offerings of up to US$5 million over a four-year period. The second allows for offerings of up to US$75 million during each 12-month period.
Issuers utilising the second exemption must provide financial statements and adhere to ongoing reporting requirements. Under both exemptions, issuers are required to make principles-based narrative disclosures available to investors to ensure transparency.
A conditional safe harbour is also proposed from the definition of an “investment contract” under the Securities Act of 1933 and the Securities Exchange Act of 1934. If the specified conditions are met, the crypto asset would be deemed not to be subject to an investment contract.
Furthermore, the rules would preempt state securities law registration and qualification requirements for offers and sales of securities issued under these exemptions, as well as certain secondary market transactions. This preemption is designed to create a uniform federal standard for these specific transactions.
The public comment period for the proposal will remain open for 60 days following its publication in the Federal Register. The proposal is currently in the rulemaking phase and has not yet been enacted into law.
