SEC Floats "Regulation Crypto Assets" Plan, Including $75M Capital-Raising Exemption

The U.S. Securities and Exchange Commission has sent a proposed rule to the White House for review that would establish a broad framework for digital-asset fundraising. Dubbed "Regulation Crypto Assets," the plan would introduce targeted exemptions from standard securities registration and outline a pathway for certain tokens to eventually move beyond being treated as investment contracts. Unveiled Aug. 18 under SEC Chair Paul S. Atkins, the proposal creates two new registration exemptions aimed at lowering legal friction for U.S.-based token launches. One would allow early-stage projects to raise up to $5 million over a four-year period without completing full securities registration. A second exemption would permit fundraising of up to $75 million within a 12-month window, contingent on audited financial statements and ongoing reporting requirements. A centerpiece of the draft is a conditional "investment contract safe harbor." Under existing SEC practice, many tokens are treated as securities because their value is tied to the continuing efforts of founders or promoters. The safe harbor would allow issuers to end that investment-contract status once the key managerial efforts that support the token's value have ceased. In effect, a project could initially issue a token as a security, raise capital using the new exemptions, build toward sufficient decentralization, and then seek reclassification of the token as a non-security crypto asset. The proposal follows a joint SEC-CFTC interpretation issued in March 2026 that characterized certain digital assets, including Bitcoin and Ether, as non-securities—a shift from the more enforcement-driven approach associated with prior SEC leadership. Atkins has positioned the initiative as an attempt to support U.S. capital formation while preserving core investor protections under securities law. The SEC has opened a public comment period, with feedback due by Oct. 20. Market implications: The $75 million exemption, paired with audited-financial requirements, would create a more standardized, regulated route for domestic fundraising that market participants can diligence and structure around. The safe harbor aims at a long-running legal uncertainty: when a token stops being a security. The SEC has historically relied on the Howey test—a 1946 Supreme Court standard—but it offers no clear mechanism for "switching off" securities status. The proposal would create one. For exchanges, the approach could ultimately lower the compliance burden of listing tokens that have achieved meaningful decentralization. For investors, it would clarify what is being purchased and which regulatory protections apply at different stages of a token's lifecycle.