What to know:
- SEC proposes a new crypto fundraising framework with two registration exemptions.
- Companies could raise to $5 million over four years or $75 million in 12 months.
- The proposal includes disclosures and a safe harbor for certain crypto assets.
The SEC crypto rule may help crypto firms find an easier method of raising money in the United States by bypassing the registration requirements of the current securities regulations. The Securities and Exchange Commission proposed the framework on Tuesday, and the rule is meant for some of the investment contracts associated with crypto assets.
The new proposal, referred to as Regulation Crypto Assets, was proposed after the March 2026 interpretation of the application of federal securities law to some of the crypto assets by the SEC.
SEC Crypto Rule Introduces Two Fundraising Exemptions
As per the SEC crypto rule proposal, there were going to be two exemptions that companies could take advantage of regarding Securities Act registration.
The first exemption was going to give issuers the ability to raise money up to $5 million within four years. The second exemption would enable issuers to raise money up to $75 million within 12 months.
For firms that adopt one of the two approaches, principles-based disclosures will be needed for the benefit of investors. As for issuers that choose the larger exemption threshold of $75 million, they will need to make disclosures relating to the financial statements and continuous reporting.
SEC is of the opinion that such changes can increase the flexibility of small cryptocurrency projects when raising capital.
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SEC Crypto Rule Could Change How Crypto Assets Are Treated
The proposal also provides a safe harbor provision for some crypto-assets which may be initially associated with an investment contract.
The proposed regulation will also make it possible for an asset not to be viewed as being associated with an investment contract under certain circumstances. Among these, the completion or abandonment of the essential management functions by the issuer of the asset is one.
This clause can be helpful for crypto projects that evolve with time, as it will give rise to a possibility of a transition of an asset beyond the investment contract framework after the managerial responsibilities of the issuing company are fulfilled.
The SEC Chair, Paul Atkins, described the initiative as being aimed at providing crypto firms with avenues to raise funds through the federal securities laws. The chairperson has also associated this framework with other initiatives to foster digital assets business within the US.
Proposal Could Reduce Offshore Incentives
Another essential component of the SEC crypto rule would pertain to the securities registration requirements on a state level.
This regulation would preempt some state securities registration requirements for issuances made pursuant to the Regulation Crypto Assets. Certain secondary market transactions linked to such issuance would be treated similarly as well.
This would allow for creating a more uniform regulatory environment in the US, according to the SEC. In addition, federal regulations are expected to provide less motivation for cryptocurrency firms to relocate their fundraising abroad due to uncertainty about US securities requirements.
It may also increase access to some digital asset investment possibilities for US investors by setting disclosure rules for the participating issuers.
SEC Crypto Rule Now Moves to Public Comment
This rule is not yet finalized. The SEC will invite public comment for 60 days following publication of the proposal in the Federal Register.
Within this time frame, cryptocurrency companies, investors, lawyers, and others involved in the market can give their comments regarding the proposed exemptive relief, disclosure requirements, safe harbor, and state-law rules.
However, it may be revised in response to those comments once the SEC evaluates them. In any case, the SEC’s proposal for SEC crypto regulation is yet another important step towards creating such a framework for fundraising in the country.
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