SEC Proposes First Formal Crypto Offering Rules

The U.S. Securities and Exchange Commission (SEC) published a 402‑page proposing release titled “Regulation Crypto Assets” on August 18, 2026. The draft creates a dedicated framework for crypto‑asset offerings, introducing two registration exemptions and a conditional safe‑harbor that could remove the securities label from certain tokens.

Two New Exemptions

The proposal offers two pathways to avoid registration under Section 5 of the Securities Act of 1933, each limited to “covered investment contracts” – tokens that have not yet been classified as digital commodities.

• Startup exemption: Allows offerings up to $5 million over a four‑year period. Issuers must provide plain‑language, principles‑based disclosures and are not required to file audited financial statements.
• Fundraising exemption: Permits offerings up to $75 million in any rolling 12‑month window. The exemption has two tiers – up to $20 million per year with unaudited statements, and up to $75 million with audited financials and ongoing reporting.

Both exemptions retain the SEC’s antifraud and antimanipulation obligations.

Conditional Safe Harbor

The draft includes a safe‑harbor that would remove the “investment contract” designation once an issuer permanently ceases all essential managerial efforts it previously promised to undertake. The SEC would rely on issuer self‑certification, but retains authority to challenge the claim.

Interaction With the CLARITY Act

The proposal arrived six days after the Senate recessed without voting on the CLARITY Act, a separate bill that would redefine the SEC‑CFTC jurisdictional split and set a four‑part decentralization test. While the SEC’s rulemaking works within existing statutory authority, the CLARITY Act would create new statutory definitions.

Public Comment Period

The Federal Register notice was published on August 21, 2026, opening a 60‑day comment window. Stakeholders—including developers, investors, and regulators—are expected to submit feedback before the deadline.

Key Takeaways for Crypto Projects

• Exemptions are limited to tokens not already classified as commodities (e.g., Bitcoin, Ethereum, XRP, Solana are excluded).
• Early‑stage projects can raise up to $5 million with minimal disclosure burdens.
• Larger raises up to $75 million trigger more extensive reporting requirements.
• The safe‑harbor provides a potential path to securities‑free status, but its practical application remains uncertain.