SEC Proposes Regulation Crypto Assets With $75M Exemption and Token Safe Harbor
The SEC’s proposed Regulation Crypto Assets would create $75 million and $5 million fundraising exemptions and a conditional safe harbor to separate tokens from original sale contracts, while antifraud rules stay in force.
The U.S. Securities and Exchange Commission has proposed Regulation Crypto Assets, a dedicated framework for offerings that involve investment contracts — deals in which buyers put money into a common enterprise expecting profits from someone else’s work — tied to crypto tokens.
The filing would let qualifying issuers raise money in the United States without full Securities Act registration, the standard process for a public securities offering. It would also create a conditional safe harbor — a defined set of conditions that, if met, would change how the asset is treated — under which a crypto asset could stop being treated as subject to that original investment contract.
U.S. crypto issuers, their investors, and projects that have kept Americans out of token sales are the parties most directly exposed. Federal antifraud and market-manipulation rules would not be lifted.
Two fundraising tracks
The larger exemption would allow eligible issuers to raise up to $75 million during any 12-month period. Companies on that route would have to make narrative disclosures about the business, the project, and the token arrangement. They would also have to submit financial statements and meet continuing reporting requirements. Some issuers would face audited financial statements, depending on the size and circumstances of the offering.
A second exemption, aimed at smaller projects, would allow an issuer to raise up to $5 million over four years. Disclosure on that track would be lighter, with more weight on principles-based information about the project and its development.
Both exemptions would apply to what the SEC describes as covered investment contracts involving crypto assets. Neither would give issuers immunity from federal antifraud and antimanipulation rules.
Separating the token from the sale
The proposed safe harbor is the piece that reaches beyond fundraising limits. U.S. crypto litigation has long turned on whether a token itself remains a security after the circumstances of its original sale have changed. The draft tries to distinguish the digital asset from the investment contract associated with it.
Under the framework, an issuer could certify that the essential managerial efforts promised under the investment contract had ended. If the other conditions of the safe harbor were satisfied, the crypto asset could then be treated as no longer subject to that contract. That is a regulatory path for tokens that begin inside securities transactions and later operate through decentralized networks or functioning markets.
SEC Chairman Paul Atkins has argued that existing securities regulations were not designed around crypto assets that may be sold through investment contracts but later operate differently. The proposal is an administrative attempt to write crypto-specific rules rather than force those offerings into conventional securities forms.
What the exemptions still require
An exempt offering would not be an unregulated offering. Issuers using the $75 million track would still have to disclose financial information and continue reporting after the sale. That is a material difference from many earlier token sales, which often supplied technical documents and marketing material but little standardized financial information.
The agency would retain enforcement authority over fraud and manipulation. The proposal operates alongside congressional work on digital-asset market structure rather than replacing it. Atkins has said legislation remains necessary even as the agency develops its own rules.
Congress is debating how regulatory authority should be divided across federal agencies. This filing is narrower: how certain token offerings could comply with securities law.
What remains unknown
The proposal carries SEC file number S7-2026-27. The public would have 60 days after publication in the Federal Register to submit comments. Eligibility standards, liability, restrictions on the exemptions, and the conditions attached to the safe harbor are still in draft.
Commenters are likely to test whether the $75 million cap is large enough for established projects and whether four years is the right window for the smaller exemption.
The rules are proposals only. Exact effective date and final rule text remain pending, and the text could change after comments are reviewed. A later Commission could alter or reverse an administrative rule, which is why Atkins has kept pointing to legislation for durability.