SEC Proposes Regulation Crypto Assets: $5M and $75M Token Exemptions

The US Securities and Exchange Commission proposed a new rule package called Regulation Crypto Assets on August 18. The framework lets crypto projects raise capital through token sales without registering a full securities offering. It is the regulator's first large-scale proposal aimed directly at primary token sales rather than exchanges or custody services.

The move came abruptly. Just last week the SEC canceled a planned meeting where the same rules were expected to be introduced. After a few days' pause, the Commission still put the proposal to a vote on Tuesday. According to Decrypt, the decision followed pressure from Wall Street and the White House, as reported by the outlet's sources.

Until now the SEC had mostly policed crypto through lawsuits and enforcement rather than through dedicated written rules. That is why outlets are calling Regulation Crypto Assets the regulator's first genuinely large-scale attempt to spell out a predictable procedure for tokens instead of waiting for the next court precedent.

Two paths to raise money without registration

Regulation Crypto Assets offers two separate exemptions. The first, a startup exemption, allows projects to raise up to $5 million over four years without registering the offering. The second targets projects willing to be transparent, letting them raise up to $75 million every year if the team publishes financial statements and ongoing reports to investors.

The difference between the two paths is practical. A small team with a tight legal budget will likely pick the first option and raise less money, but skip audit costs. A project backed by funds will more likely take the second path. $75 million is enough for a full network launch, and the reporting overhead pays for itself at that scale.

The chosen thresholds are not arbitrary. The $75 million figure repeats the cap that already applies under Reg A+ tier 2, the SEC's established tool for raising capital without a full IPO. The regulator carried a tested model over from traditional markets instead of inventing something new for crypto.

Both options require project disclosures. Federal antifraud and antimanipulation rules apply regardless. Neither exemption removes them.

A conditional safe harbor to delink tokens from contracts

A separate part of the proposal is a conditional safe harbor. It would let a token eventually "delink" from the investment contract through which it was originally sold. In practice, an asset sold as a security at launch could later trade as an ordinary commodity, provided the network proves it has reached sufficient decentralization.

The industry has asked for exactly this mechanism for years, especially after lawsuits against Ripple and Coinbase, where courts never gave a clear answer on when a token stops being a security. The safe harbor does not settle that question for good, but it gives projects a concrete benchmark for the first time instead of guesswork based on old court rulings.

Why the SEC stopped waiting on Congress

The Clarity Act formally remains the flagship market-structure bill for crypto. But Senate negotiations stalled. The bill is moving through both the Agriculture and Banking committees at once, and each wants its own version to prevail. The vote the industry was counting on got pushed to September.

Back in late July, SEC Chair Paul Atkins had already signaled the Commission was ready to act on its own if the bill fell short this year, and the August 18 proposal delivers on that. Tellingly, the Commission dropped its original plan to hold a quiet meeting and instead unveiled the rules publicly right after the pause. For the industry, that reads as a signal that the SEC is no longer willing to simply wait on Congress.

A similar pattern already played out with stablecoins. When Congress passed the GENIUS Act, it was that dedicated law, not a broad market-structure overhaul, that first gave stablecoin issuers clear, testable rules. The SEC appears unwilling to wait for the Clarity Act to repeat that path for every other token, choosing instead to move directly through its own rulemaking.

Commissioner Peirce's caveat

SEC Commissioner Hester Peirce, known among market participants as an advocate of a flexible approach to crypto, acknowledged the proposed exemptions would not cover every type of project. She called on the industry to submit feedback on how the rules should evolve before they take final shape.

"The Commission wants to accommodate innovation on many fronts, and our rules need to be tailored to changing market developments and designed to protect investors and market integrity. This proposal is one step on a long road toward a clear, sensible, enforceable regulatory framework for crypto."

- Hester Peirce, SEC Commissioner, from a statement accompanying the SEC's August 18, 2026 proposal

Regulation Crypto Assets by the numbers

The proposal's key parameters are summarized below.

The comparison with Reg A+ tier 2 illustrates the SEC's approach well. Rather than inventing a new scale of limits specifically for crypto, the regulator borrowed a model already tested in court for traditional companies. It reads more like carrying over a long-standing tool to a new asset class than a wholesale rewrite of the rules.

Risks and open questions

Early industry reactions to the proposal are mostly positive, though not without reservations. The main doubts concern not the principle itself but where the new exemptions' limits actually fall.

• Narrow coverage: the exemptions will not fit every project. Those with unconventional token models, such as rewards for network validators, may not meet the SEC's criteria.
• The public comment period is not yet over, and the final rule text may differ from the draft unveiled on August 18.
• Political risk: the Commission's makeup could change after the 2026 midterm elections, taking the whole proposal's fate with it.
• The safe harbor is only sketched out in broad strokes, and the criteria for "sufficient decentralization" still need to be spelled out in detail.

How the market reacted to the news

The crypto market responded with restraint. Bitcoin held near $64,000, while Ethereum traded just above $1,900. Traders showed no sharp moves right after the news broke.

That makes sense, since Regulation Crypto Assets deals with the primary sale of new tokens rather than already-established assets like Bitcoin or Ethereum, so their prices barely reacted. The news matters far more to teams still preparing their own token launch, who until now had no predictable way to do it within US law.

The proposal's real effect will play out over months. First comes the comment period, then a final rule, and only after that will the first projects actually use the new exemptions. But the fact that the SEC put forward a concrete mechanism instead of the "clarity" it had promised for years is already a signal to the industry that the regulator is ready to move without Congress.

For venture funds backing crypto startups, this is a practical yardstick. They can now plan a round's structure around a concrete SEC cap instead of vague promises about a future law. The change matters less for retail investors, who will still mostly buy tokens on the secondary market rather than directly from an issuer under the exemption.