WASHINGTON, August 18, 2026 — The U.S. Securities and Exchange Commission proposed a new regulatory framework for certain investment contracts involving crypto assets, including registration exemptions for offerings of up to $75 million and a conditional safe harbor addressing when a crypto asset would no longer be subject to an investment contract.
The proposed rules, titled “Regulation Crypto Assets,” would establish two exemptions from the registration requirements of the Securities Act of 1933 specifically tailored to certain investment contracts involving crypto assets. The first would be a one-time exemption permitting offerings of up to $5 million during a four-year period, while the second 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 investors. Issuers relying on the second exemption would also be required to provide financial statements and would be subject to ongoing reporting requirements.
The SEC said the framework is intended to address barriers to responsible capital formation and innovation in U.S. crypto asset markets while preserving investor protections under federal securities laws. The proposal follows the Commission’s March 2026 interpretation clarifying how federal securities laws apply to certain crypto assets and transactions involving them.
A pathway beyond investment-contract treatment
A central component of Regulation Crypto Assets is a conditional safe harbor from the term “investment contract” in the definitions of “security” under 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.
SEC Chairman Paul S. Atkins said the safe harbor would apply once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would undertake under an investment contract. The provision builds on the Commission’s earlier interpretive guidance concerning the application of federal securities laws to crypto assets.
“As we continue the Commission’s efforts to provide clarity for crypto markets, and as Congress works to establish a lasting regulatory framework, Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws,” Atkins said.
The proposed safe harbor therefore addresses circumstances in which a crypto asset would no longer be subject to an investment contract for purposes of the relevant statutory definitions. It does not establish that crypto assets are categorically outside federal securities regulation.
Federal preemption for qualifying transactions
The proposed rules would also preempt state securities law registration and qualification requirements for offers and sales of securities issued under an exemption in Regulation Crypto Assets. According to the SEC, the preemption would also extend to certain secondary-market transactions.
The provision would accompany the proposed federal offering exemptions and disclosure requirements as part of the Commission’s broader framework for certain investment contracts involving crypto assets. The SEC said the proposal is intended to reduce incentives for issuers to create and operate offshore while expanding investment opportunities for U.S. investors with stronger and more consistent protections.
Atkins described the regulatory framework as part of the Commission’s strategy to “onshore innovation” in crypto asset markets. The proposal forms part of a broader SEC effort this year to provide greater clarity on the application of federal securities laws to digital assets.
The SEC’s broader crypto regulatory framework
Regulation Crypto Assets follows the Commission’s March 2026 interpretation on the application of federal securities laws to crypto assets. The earlier interpretation clarified how the federal securities laws apply to certain crypto assets and transactions involving them, while the new proposal would establish tailored offering exemptions and a conditional investment-contract safe harbor.
Together, the interpretation and proposed rules represent an effort by the Commission to establish a more tailored securities framework for crypto asset markets. The SEC said the proposed rules are intended to bring greater clarity to when crypto assets fall within federal securities laws while reducing incentives for issuers to establish and operate offshore.
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register. Regulation Crypto Assets remains a proposal, meaning the exemptions and safe harbor described by the Commission are not currently in effect.
Why it matters
Regulation Crypto Assets would represent a significant change in the SEC’s approach to crypto capital formation by creating registration exemptions specifically tailored to certain investment contracts involving crypto assets. The larger exemption would permit qualifying offerings of up to $75 million during each 12-month period while requiring financial statements and ongoing reporting.
The conditional safe harbor addresses a separate regulatory question by establishing circumstances in which a crypto asset would be deemed not to be subject to an investment contract for purposes of the Securities Act and Exchange Act definitions of “security.” Together with the proposed state-law preemption, the framework could provide greater regulatory clarity for qualifying crypto issuers and transactions if the Commission ultimately adopts the rules.
