The Securities and Exchange Commission (SEC) proposed a new rule on August 18 that would let crypto companies raise money through two exemptions from standard securities registration.
The plan, called “Regulation Crypto Assets,” sets one path capped at $5 million every four years and another at $75 million per year, alongside a safe harbor that could pull certain crypto assets outside the legal definition of a security.
Two Paths to Raise Capital
Under the proposal, the smaller exemption is a one-time offering worth up to $5 million over a four-year period. Issuers using it would need to give investors narrative disclosures about the offering, written in plain language rather than the dense form typical of a full registration statement, and the requirements stay fairly informal by comparison.
The larger exemption goes up to $75 million in any 12-month stretch, but it comes with more paperwork: financial statements and ongoing reporting obligations for as long as a company keeps raising money under it.
The rules also includes a conditional safe harbor removing certain crypto assets from the “investment contract” definition found in both the Securities Act of 1933 and the Securities Exchange Act of 1934.
If a project meets the conditions, largely tied to whether management has finished or permanently stopped the work it promised investors, the token would no longer count as an investment contract, and by extension, not a security. Chairman Paul Atkins said the change would apply “once an issuer has completed or permanently ceased all essential managerial efforts” it promised.
“Congress designed our securities laws to amplify – within specific guardrails – opportunities for entrepreneurs to innovate and build new products,” Atkins added. “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 rule further preempts state securities registration and qualification requirements for offerings made under either exemption, plus some secondary market sales.
The Backdrop in Washington
The proposal builds on the SEC interpretation from March 2026 that first laid out how federal securities law applies to certain crypto assets and transactions. It also landed one day before a White House meeting scheduled for August 19, where executives from Ripple, Coinbase, Chainlink, Paradigm, Kalshi and a16z are expected to sit down with regulators as CryptoPotato had earlier reported.
President Donald Trump is reportedly expected to attend, and Atkins himself is also expected to show up, per updates from journalist Eleanor Terrett. Reports have suggested that some traditional finance executives could join too, though there is no official confirmation of a full guest list.
That meeting comes as the CLARITY Act, the broader bill meant to draw a line between SEC and CFTC authority over digital assets, sits stalled in Senate. Lawmakers left for their August recess without a vote, and Majority Leader John Thune has filed cloture for a vote on September 15.
Unresolved disputes over ethics provisions, anti-money laundering rules and stablecoin rewards for customers have slowed things down, with banks lobbying against the reward idea because it could pull deposits out of traditional systems.
The SEC will take public comments on Regulation Crypto Assets for 60 days once the proposal is published in the Federal Register.
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