SEC Proposes New Crypto Asset Offering Rules Seeks Public Feedback by October 20

The U.S. Securities and Exchange Commission (SEC) has proposed sweeping new rules for crypto asset offerings, known as "Regulation Crypto Assets," with comments due by October 20, 2026. The proposal, published on August 21, 2026, spans 146 pages and includes 149 requests for feedback, seeking to address the unique challenges of regulating digital assets. The SEC aims to create a framework that balances investor protection with technological innovation, asking whether its proposed rules are workable and appropriately tailored.

Key elements of the proposal include clarity on the definition of "investment contract" for crypto assets, guidance on applying the "Howey" test, and two exemptions for offerings. The "startup exemption" allows offerings of up to $5 million over four years, while the "fundraising exemption" permits offerings of up to $75 million within a 12-month period. The rules also introduce crypto-specific disclosure requirements, a safe harbor for determining when a crypto asset is no longer subject to an investment contract, and "bad actor" disqualification provisions.

The SEC acknowledges that its previous enforcement-based approach created uncertainty and is now shifting toward clearer classifications and tailored disclosures. The proposed rule aims to accommodate the transition of crypto assets from investment contracts to standalone digital assets. The definitions provided, such as "crypto asset" and "covered investment contract," are critical as they determine eligibility for exemptions and offering limits.

Other aspects of the proposal include rules on inflation adjustments for offering limits, crypto-specific disclosures, and disqualification criteria for issuers with a history of securities-related misconduct. The SEC is seeking public input on whether these rules are practical, flexible, and effective in protecting investors without stifling innovation.