SEC Unveils Proposed Crypto Securities Framework, Including New Capital-Raising Exemptions

The U.S. Securities and Exchange Commission has released a proposal for a new securities framework tailored to certain investment contracts tied to crypto assets. Dubbed the \u0022Crypto Assets Regulation,\u0022 the plan is intended to streamline capital formation for crypto firms in the U.S. and clarify which transactions fall under federal securities laws. The SEC said the proposal builds on interpretive guidance it issued in March 2026 on how federal securities rules apply to specific crypto assets and related transactions. Chairman Paul S. Atkins described the initiative as part of an effort to create clearer, more transparent paths for fundraising under federal law, curb the migration of crypto innovation offshore, and encourage operations to remain in or return to the United States. Two registration exemptions under the Securities Act of 1933 The proposal would establish two crypto-focused exemptions from Securities Act registration requirements. One exemption would allow issuers to raise up to $5 million as a one-time amount over a four-year period. A second, broader exemption would permit issuance of up to $75 million in securities during each 12-month period. Both exemptions would require issuers to provide investors with specified, principle-based disclosures. Companies relying on the $75 million exemption would also need to file financial statements and meet ongoing reporting obligations. Conditional \u0022safe haven\u0022 for certain crypto assets The SEC is also proposing a conditional safe haven related to the \u0022investment contract\u0022 analysis. If defined conditions are satisfied, a crypto asset could cease to be treated as an investment contract within the \u0022security\u0022 definition under the Securities Act of 1933 and the Securities Exchange Act of 1934. Atkins said the safe haven could apply in particular where an issuer fully or permanently stops carrying out the essential managerial activities it committed to under the investment contract. The SEC said this could allow some tokens to move to a different legal status over time as projects mature and reliance on the issuer declines. The proposal also would preempt certain state-level securities registration and qualification requirements for eligible crypto asset sales conducted under federal exemptions. The SEC indicated the framework would apply not only to initial offerings but also to certain secondary market transactions. The Commission argued the approach would reduce incentives for crypto firms to operate outside the U.S. due to regulatory uncertainty, while giving U.S. investors access to more crypto-asset investment opportunities under more consistent investor-protection standards. *This is not investment advice. Continue Reading: BREAKING: SEC Releases LongAwaited Cryptocurrency Regulations – A Major Development