SEC Proposes New Crypto Offering Framework, Marking Shift from “Regulation by Enforcement”

The SEC is proposing a significant change in how it regulates crypto offerings.

On August 18, 2026, the Commission proposed “Regulation Crypto Assets,” a new framework that would create tailored exemptions from Securities Act registration for certain offerings involving crypto assets. 

Chairman Paul Atkins has criticized the SEC’s past approach to crypto-related matters as “regulation by enforcement” and an attempt to fit a “square peg in a round hole.” The proposed rules reflect an acknowledgment that the existing securities offering framework was not well suited to the distinctive features of crypto transactions. Rather than simply applying that framework as-is, the proposal would create crypto-specific pathways for offerings that are subject to the federal securities laws.

The proposal follows the SEC’s March 2026 interpretive guidance and marks perhaps the clearest step yet to move away from the Commission’s prior enforcement-driven approach to the crypto markets. It also comes as the CLARITY Act moves through Congress, putting agency rulemaking and legislation on parallel tracks. 

What would change?

The proposal would create two new registration exemptions for offerings of covered investment contracts involving crypto assets:

• a one-time exemption for offerings of up to $5 million over four years; and
• an exemption permitting offerings of up to $75 million during any rolling 12-month period.

Both would require principles-based narrative disclosures, with the larger exemption carrying additional financial-statement and ongoing-reporting requirements. The exemptions would also preempt certain state securities registration and qualification requirements.

The proposal also includes a potentially significant conditional safe harbor from the term “investment contract” in the definitions of “security” in the securities laws. As Chairman Atkins described it, the safe harbor could apply once an issuer has completed or permanently ceased the essential managerial efforts it represented or promised it would undertake.

Why it matters?

For crypto companies and investors, the proposal could materially change the regulatory landscape for raising capital and developing token networks in the United States. By putting tailored, prospective rules for crypto offerings on the table, the SEC is clearly trying to provide pathways for compliant U.S. capital formation while reducing incentives for issuers to structure offerings and operations offshore. Chairman Atkins has framed the initiative as part of a broader effort to “onshore innovation in crypto asset markets for generations to come.”

Importantly, however, the proposal does not alter the threshold Howey analysis or establish categorical treatment for particular crypto assets or transactions. Whether any particular transaction constitutes an investment contract—and particularly, whether purchasers reasonably expect profits based on the essential managerial efforts of others—remains a fact-specific inquiry based on the particular facts and circumstances. 

Issuers and investors should consider how the proposed framework could affect future capital-raising strategies, disclosure practices, network development, and secondary-market activity—and whether to engage with the SEC during the rulemaking process. Comments will be accepted for 60 days following publication of the proposing release in the Federal Register.