The US SEC has proposed ‘Regulation Crypto Assets’, a tailored securities offering framework for certain crypto asset investment contracts.
The proposal builds on the Commission’s March 2026 interpretive guidance, which addressed how existing federal securities laws apply to specific crypto assets and related transactions. Together, the two measures form part of a broader regulatory approach aimed at addressing barriers to capital formation in domestic crypto asset markets while maintaining investor protection standards under federal securities law.
The proposed rules introduce two exemptions from the registration requirements of the Securities Act of 1933, each tailored to investment contracts involving crypto assets. The first is a one-time exemption permitting offerings of up to USD 5 million over a four-year period. The second allows offerings of up to USD 75 million within each 12-month period. Issuers relying on either exemption would be required to provide principles-based narrative disclosures to investors. Issuers using the second, larger exemption would face additional obligations, including the provision of financial statements and ongoing reporting requirements.
Safe harbor and state preemption
Alongside the exemptions, the proposal includes a conditional safe harbor from the definition of ‘investment contract’ under the Securities Act of 1933 and the Securities Exchange Act of 1934. Where the conditions of the safe harbor are met, a crypto asset would not be treated as subject to an investment contract for the purposes of those definitions of ‘security’. According to SEC, the safe harbor would apply once an issuer has completed, or permanently ceased, the managerial efforts it had represented it would undertake under the investment contract.
The proposed rules 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 involving those securities.
Context and next steps
In addition, SEC has framed the proposal as an extension of its March 2026 interpretive guidance, with the stated aim of clarifying when crypto assets fall within the scope of federal securities laws. According to the Commission, the measures are also designed to reduce incentives for issuers to structure operations offshore and to expand investment opportunities for domestic investors under defined disclosure and reporting conditions.
The proposal follows continued discussion in the US Congress regarding a broader regulatory framework for crypto assets. SEC Chairman Paul S. Atkins described the proposal as consistent with the Commission’s earlier interpretive position and as intended to provide crypto asset market participants with defined pathways to raise capital under existing securities laws.
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.
