U.S. SEC proposes first major crypto rule in surprise announcement

On Tuesday, the Securities and Exchange Commission unveiled a proposal for new rules governing specific investment contracts linked to cryptocurrency assets. This proposal, named Regulation Crypto Assets, builds upon the Commission's March 2026 guidance clarifying the application of federal securities laws to certain crypto assets and related transactions.

The proposed regulations include two exemptions from registration obligations under the Securities Act of 1933. The first exemption would permit offerings totaling up to $5 million over a four-year span, while the second would enable offerings of up to $75 million each year. Both exemptions mandate principles-based disclosures to investors, as well as financial statements and ongoing reporting for the second exemption.

Furthermore, the proposal establishes a conditional safe harbor from the term "investment contract" in the definitions of "security" under the Securities Act of 1933 and the Securities Exchange Act of 1934. If the conditions for this safe harbor are met, a crypto asset would not be classified as an investment contract for purposes of those security definitions.

The proposed regulations would also supersede state securities law registration requirements for offers and sales under the exemptions and certain secondary market transactions. SEC Chairman Paul S. Atkins emphasized that the goal of Regulation Crypto Assets is to provide clarity for crypto markets and entrepreneurs as the Commission continues to provide guidance and lawmakers work on a lasting regulatory framework.

The public comment period on the proposal will remain open for 60 days following its publication in the Federal Register.