SEC Unveils 'Regulation Crypto Assets' Proposal

The US Securities and Exchange Commission proposed "Regulation Crypto Assets" on August 18, 2026, a new framework intended to create tailored securities offering pathways for crypto assets. The proposal applies to "covered investment contracts," where the contract is the security, not necessarily the underlying crypto asset itself; tokenized securities are excluded. For sophisticated counsel and clients, this is the first bespoke SEC registration exemption regime for digital assets, offering potential clarity after years of applying legacy securities laws by analogy. The proposal could significantly alter capital-raising strategies for crypto and fintech projects. The framework includes a $5 million "startup exemption" with limited disclosure and a two-tiered "fundraising exemption" modeled on Regulation A for offerings up to $75 million, with corresponding ongoing reporting obligations. It also introduces a safe harbor to determine when an investment contract has ceased to exist. Market participants should monitor the proposal's progress toward a final rule and consider submitting comments, which are due by October 20, 2026.