The U.S. Securities and Exchange Commission has proposed Regulation Crypto Assets, a new framework designed to give certain crypto projects clearer rules for raising capital while keeping them within federal securities protections.
The proposal, released August 18, would create two exemptions from securities registration for certain investment contracts involving crypto assets. It also includes a conditional safe harbor that could allow some crypto assets to move outside the federal securities framework once specified conditions are met.
What Regulation Crypto Assets would change
The SEC’s proposal focuses on what it calls “covered investment contracts.” These involve a crypto asset that is not itself a security but is initially tied to an investment contract based on the issuer’s promised managerial efforts.
The first exemption would allow eligible issuers to raise up to $5 million over a four-year period. The second would allow offerings of up to $75 million during any 12-month period. Both paths would require investor disclosures, while the larger exemption would also require financial statements and continuing reports.
The proposal would not remove investor-protection requirements. Issuers using the exemptions would remain subject to federal antifraud and antimanipulation provisions.
Why the safe harbor matters
One of the proposal’s most important features is its conditional safe harbor. If an issuer fulfills the essential managerial commitments that originally caused the investment contract to exist, the contract could eventually cease to qualify as an investment contract.
That could allow the underlying crypto asset to fall outside the federal securities definition, subject to the proposal’s conditions and required SEC filings. The framework therefore creates a potential path from early-stage fundraising toward a functioning crypto network or application.
The SEC’s move comes after its March 2026 interpretation clarified how federal securities laws apply to certain crypto assets and transactions.
Regulation Crypto Assets is still only a proposal, not final law. The SEC has opened a 60-day public comment period after Federal Register publication. Its impact will depend on the final rules and how Congress’s broader crypto legislation develops.
