SEC Proposes Regulation Crypto Assets to Streamline Capital Raising

The U.S. Securities and Exchange Commission proposed a new regulatory framework titled Regulation Crypto Assets on August 18, 2026, to provide a tailored regime for raising capital. The proposal introduces two primary registration exemptions: a Startup Exemption allowing early-stage projects to raise up to $5 million over four years if they plan to decentralize, and a Fundraising Exemption allowing U.S.-based issuers to raise up to $20 million in Tier 1 or $75 million in Tier 2 annually. Token issuers using these exemptions must still provide financial statements and adhere to reporting requirements.

Under the leadership of Chair Paul Atkins, the commission also introduced an Investment Contract Safe Harbor. This allows issuers to certify via a transition report that essential managerial efforts are complete, potentially allowing assets to exit securities qualification upon reaching sufficient decentralization. The framework aims to democratize access by allowing retail investors to participate in exempt offerings and prevents states from imposing separate registration requirements on qualifying offerings.

Chairman Atkins initiated the rulemaking after the U.S. Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act before its August recess. While the SEC is acting under its current statutory authority to provide immediate legal clarity, Atkins noted that formal legislation remains indispensable to ensure rules are not unwound by future regulators. The commission, now composed of pro-crypto Republicans, intends to shift away from the regulation by enforcement strategy used by former Chair Gary Gensler. A 60-day public comment period will begin once the rules are published in the Federal Register.