SEC Proposes New Exemptions and Safe Harbor for Crypto Offerings

The US Securities and Exchange Commission has proposed "Regulation Crypto Assets," a new framework intended to create a viable compliance path for cryptoasset offerings. The proposal, enjoying unified support from the commissioners, marks a significant shift from the prior administration's enforcement-led approach. It introduces two tailored offering exemptions: a "Startup Exemption" for raises up to $5 million and a tiered "Fundraising Exemption," modeled on Regulation A, for raises up to $75 million annually. It also establishes a safe harbor allowing an issuer to certify when its token is no longer part of an investment contract, addressing a core uncertainty under the Howey test.

For crypto issuers, the proposed rules could provide a clear alternative to existing frameworks like Regulation D, potentially reducing legal risk and compliance costs. The broad preemption of state securities registration laws would further streamline capital formation. However, the proposal offers no new relief for exchanges or broker-dealers, leaving secondary market trading in a continued state of uncertainty. Counsel should advise clients on the upcoming comment period, which closes October 20, 2026, as stakeholder feedback will shape the final rule.