SEC Unveils Proposed Crypto Framework, Including $75M Annual Fundraising Exemption

The U.S. Securities and Exchange Commission on August 18 proposed a new framework, dubbed Regulation Crypto Assets, that would create fundraising exemptions for certain crypto investment contracts and set disclosure standards tailored to token-based projects. Under the proposal, qualifying issuers could raise capital without registering the offering, using one of two pathways: a single offering of up to $5 million over a four-year period, or offerings totaling up to $75 million in any 12-month period. Issuers relying on either exemption would have to provide principles-based narrative disclosures. Those using the $75 million annual cap would also be required to provide financial statements and ongoing reports. The SEC also proposed a conditional safe harbor that could keep certain qualifying crypto assets from being treated as "investment contracts" under the Securities Act and Exchange Act definitions, provided specific conditions are met. The package includes antifraud and antimanipulation provisions. The disclosure expectations outlined in the proposal cover tokenomics, source code, governance arrangements, project structure, roadmaps, and core teams, aiming to give investors standardized information about qualifying projects. On state regulation, the SEC proposal would preempt state securities registration and qualification requirements for offerings conducted under the Regulation Crypto Assets exemptions. The initiative builds on the SEC's March 2026 interpretation addressing how federal securities laws apply to certain crypto assets. SEC Chairman Paul S. Atkins said the objective is to provide clearer, workable routes for crypto entrepreneurs to raise capital within the federal securities framework. For projects seeking safe-harbor treatment, the SEC described decentralization benchmarks that would include independent governance and distributed nodes. The proposal also points to token market independence as a benchmark, meaning token value should be driven by utility rather than centralized marketing. The SEC will accept public comments for 60 days after the proposal is published in the Federal Register. Commissioner Hester Peirce said rules should be designed so well-intentioned participants can comply without having to abandon legitimate activity.