SEC Nears Release of "Reg Crypto" Proposal to Streamline Token Fundraising Rules
The U.S. Securities and Exchange Commission is moving toward a formal crypto rulebook, with Chair Paul Atkins saying a "Reg Crypto" proposal has entered White House review, the final step before public release.
The draft framework centers on token-based capital raising under the Securities Act of 1933, aiming to create clearer pathways for projects to raise funds without full securities registration at launch. According to Atkins, it would introduce a new exemption tailored to crypto projects, including a startup carve-out allowing raises of about $5 million during a time-limited period estimated at up to four years. A separate fundraising exemption would permit offerings of roughly $75 million within a 12-month window.
Instead of a full registration process, eligible projects would follow simplified disclosure requirements focused on financial condition and basic ongoing reporting.
A key element is a safe-harbor structure designed to clarify when a token can transition from being treated as a security to a non-security as a network becomes more decentralized, offering a defined route that reduces regulatory uncertainty. The SEC's approach also echoes Section 103 of the Senate's proposed Clarity Act, which outlines a similar exemption framework with fundraising limits and disclosure rules.
Alongside "Reg Crypto," the SEC is also preparing an "innovation exemption" under the Securities Exchange Act of 1934 focused on decentralized finance. The concept would allow limited on-chain trading of tokenized securities on decentralized platforms, including automated market makers, without immediately triggering full broker-dealer or exchange registration. The SEC described the structure as a sandbox enabling both traditional financial institutions and crypto-native firms to test models within defined boundaries.
The SEC is also working with the Commodity Futures Trading Commission under a new Memorandum of Understanding aimed at reducing overlap, clarifying product definitions, and aligning enforcement between the agencies. Atkins said the SEC's rulemaking efforts will continue even as legislation in Washington advances slowly, while cautioning that political shifts could affect regulatory momentum. He urged industry participants to stay engaged ahead of the 2026 midterm elections.
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