The Securities and Exchange Commission published its proposed "Regulation Crypto Assets" framework on Tuesday, August 18, four days after abruptly canceling the meeting at which commissioners were set to vote on the same proposal. The agency had cited an "unforeseen scheduling issue" when it called off the August 14 session. The proposal is now formally before the public for a 60-day comment period following its publication in the Federal Register.
The two exemptions and what they require
The proposal creates two distinct paths for crypto companies to raise capital without registering an offering under the Securities Act of 1933. The first, aimed at startups, permits offerings of up to $5 million across a four-year period. Issuers under that track must publish disclosures at the start and end of the period and make principles-based narrative disclosures available to investors.
The second path allows offerings of up to $75 million in each 12-month period. That route carries stricter obligations: financial statements, ongoing reporting requirements, and compliance with the antifraud and antimanipulation provisions of the securities laws.
"Today, we are charting a new course with a package of exemptions that would facilitate capital formation and allow crypto asset innovation to flourish in the United States in the years ahead," SEC Chairman Paul Atkins said in a statement Tuesday.
The proposed rules also include a conditional safe harbor. If the specified conditions are met, a crypto asset would no longer be considered to fall under an investment contract for purposes of the definitions of "security" in the Securities Act of 1933 and the Securities Exchange Act of 1934. The trigger is the completion or permanent cessation of all essential managerial efforts that an issuer represented or promised it would take.
"In line with the Commission's earlier interpretative guidance, this proposal would also allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract," Atkins said.
Both exemptions build on guidance the SEC and the Commodity Futures Trading Commission jointly issued in March 2026, which clarified how federal securities laws apply to digital assets and stated that most such assets were not securities. The proposed rules would also preempt state securities law registration and qualification requirements for offers and sales made under the Regulation Crypto Assets exemptions.
What is not in the proposal
The rules do not include the "innovation exemption" for tokenized securities, a separate SEC initiative that Atkins had previously described as allowing companies to experiment with blockchain-based financial products. That project remains unfinished. The CFTC has its own meeting scheduled for Thursday on crypto, artificial intelligence, and prediction markets, where the agency said it intends to address areas where regulatory action can complement future congressional legislation.
SEC Commissioner Hester Peirce, one of three Republican commissioners on the five-member panel, offered a measured read of what the proposal represents.
"This proposal is one step on a long road toward a clear, sensible, enforceable regulatory framework for crypto," she said.
Where the CLARITY Act stands while the SEC moves
The proposal arrived as the Senate still has not advanced the Digital Asset Market Clarity Act. Before senators left Washington for their August recess, Majority Leader John Thune filed a cloture motion on the bill. That motion is set to ripen on September 15. If lawmakers cannot secure floor time for a vote in the approximately 14 days senators are in session after the recess ends, the bill faces an even shorter window before Congress breaks again ahead of November's elections.
Atkins addressed the legislative gap directly and did not suggest the SEC's rulemaking replaces what Congress is working toward.
"Given the progress made in Congress to date on market structure legislation, let me be clear up front: Legislation remains indispensable to enacting 'future-proofed' rules of the road that are durable enough to protect the work we are undertaking today from being unwound by a future rogue regulator," he said. "The SEC has and will continue to support Congress in delivering the CLARITY Act to President Trump's desk."
White House crypto adviser Patrick Witt, who spoke at the Wyoming Blockchain Symposium on Tuesday after Atkins canceled his scheduled appearance there, had signaled at the SALT conference earlier that day what would follow if the CLARITY Act stalled.
"There is a robust set of rulemaking that will go out," Witt said. "We can't wait forever as we know, and we've got the window in September here and if ultimately it doesn't succeed, they're going to let loose."
"Congress designed our securities laws to amplify, within specific guardrails, opportunities for entrepreneurs to innovate and build new products," Atkins said in the SEC's release. "Advancing this regulatory framework is a key element in our strategy to advance the rule books for the modern era and another step by the Commission to onshore innovation in crypto asset markets for generations to come."
The industry response and what comes next
Digital Chamber CEO Cody Carbone said the proposal reflected suggestions the crypto industry had submitted. He said his organization "will continue to work with the SEC to ensure consumers and the digital assets industry can thrive onshore in the U.S."
The 60-day comment window typically precedes months of agency review before a final rule is written. The proposal is docketed as S7-2026-27. The SEC's March interpretation, on which the new proposal builds, confirmed that certain crypto assets and transactions do not fall under the federal securities laws. Tuesday's rules create the capital-raising structure that would let companies operate within those established boundaries.
Roman Zaika
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