Regulation Crypto Assets is the SEC's proposed rulebook for how crypto projects can raise money and, later, stop being treated as investment contracts. The public comment period closed on 20 October 2026, so the proposal now moves to the Commission, which can finalise, change or drop it. Nothing in it is in force yet.
For allocators and founders the proposal matters because it would replace case-by-case enforcement with defined routes: two offering exemptions, a conditional safe harbor and federal preemption of state registration. It is also one of the few paths forward that does not need Congress, which became more relevant after the Senate vote on the CLARITY Act failed.
What is Regulation Crypto Assets?
The SEC announced the proposal on 18 August 2026 in Press Release 2026-76. It builds on the Commission's March 2026 interpretation of how federal securities law applies to certain crypto assets. The rule would apply to crypto asset investment contracts, meaning arrangements where buyers rely on an issuer's efforts, rather than to the underlying token as such.
The proposing release was published in the Federal Register on 21 August, which started a 60-day comment clock. That is why the deadline fell on 20 October. Chairman Paul Atkins said the proposal seeks to give entrepreneurs and market participants clear pathways.
How do the offering exemptions work?
The proposal creates two exemptions from Securities Act registration. Both require principles-based narrative disclosures, and antifraud rules still apply in full. According to a Harvard Law School Forum summary, the structure is:
- Startup exemption: up to $5 million over four years, with public filings at the start and end of the offering and bad actor disqualification modelled on Regulation A.
- Fundraising exemption, Tier 1: up to $20 million per 12-month period, with a discussion of financial condition and unaudited financial statements.
- Fundraising exemption, Tier 2: up to $75 million per 12-month period, with audited financial statements and ongoing reporting.
The thresholds echo existing frameworks such as Regulation A, which will be familiar to issuers and their counsel. The proposal covers non-security crypto assets sold under investment contracts. Tokenised securities sit elsewhere, under the separate SEC innovation exemption for tokenized securities.
What is the investment contract safe harbor?
The safe harbor is the part most likely to shape how tokens trade after launch. If its conditions are met, the crypto asset is treated as no longer subject to an investment contract under the Securities Act and the Exchange Act. The issuer would need to:
- Complete, or permanently stop, the essential managerial efforts it promised investors, and make no new promises of that kind.
- File a public certification with the SEC, with supporting analysis, which the Harvard summary says is made on Form TR.
Because the issuer certifies its own status, the SEC could still challenge the claim later. The proposal does not set numerical decentralisation benchmarks, which gives flexibility but also leaves room for dispute.
What would state preemption change?
The proposal would preempt state registration and qualification requirements for offers and sales under the exemptions. It would also reach certain secondary market transactions, as long as the issuer keeps meeting the information and reporting conditions. For builders this lowers the cost of a multi-state offering. For critics, including state regulators, it raises investor protection and federalism questions. Those objections are expected rather than confirmed in the comment record we reviewed, so treat them as a risk to the timeline.
What did commenters ask for?
More than 100 submissions had been filed by the deadline, The Block reported. Three positions stand out:
- Hyperliquid Policy Center: supports adopting the rule but calls the safe harbor too narrow, saying its certification requirement is one many projects cannot make. It also asked the SEC to codify that airdrops given for nothing in return involve no investment of money.
- AIMA: wants clearer disclosure of investors' legal rights and risks, and a separation of economic exposure from ownership, redemption and cash-flow rights.
- SIFMA: wants changes to how issuers opt in and urges quick action on investor protection, noting that the five-year term of the innovation exemption makes early design choices important.
The split is useful to read. Crypto-native groups want wider access to the safe harbor, while traditional finance groups want stronger investor-facing disclosure. The final text may have to balance both.
Why it matters beyond the proposal
An administrative rule is easier for a future Commission to change than a statute, so any final version carries policy risk. It also does not cover everything. The proposal is about offerings, not exchange registration, custody or market surveillance, and stablecoin issuers are handled under the separate GENIUS Act rulemaking. Reading the three together gives a more complete picture of the US rulebook than any one of them does.
For teams building or allocating to token projects, the practical questions are modest ones. Which exemption would a given raise fall under, what ongoing reporting would follow, and could the project credibly certify an end to its managerial efforts? None of these can be answered finally until the rule is adopted.
What to watch
- Whether the SEC revises the safe harbor in response to the certification criticism.
- The timing of a final rule. We found no announced date, and the political calendar around the November elections may affect it.
- State regulator responses to preemption, including any legal challenge after adoption.
- Congressional action. Lawmakers could still revisit market structure legislation in a post-election session, which could change how much of this rule is needed.
Sources
- SEC: SEC Proposes New Regulation Crypto Assets (Press Release 2026-76)
- Harvard Law School Forum on Corporate Governance: SEC Proposes Regulation Crypto Assets
- The Block: Crypto firms, Wall Street push SEC to revise Regulation Crypto Assets as comments close
- Mondaq: SEC Seeks Comments On Proposed Crypto Asset Offering Rules By October 20, 2026
This article is for informational purposes only and does not constitute financial, investment, legal or tax advice, or an offer or solicitation to buy or sell any asset or fund interest. Digital assets are highly volatile and you may lose some or all of your capital. Past performance is not indicative of future results.