SEC Proposes New Crypto Regulations to Boost Investor Confidence

The US Securities and Exchange Commission (SEC) has proposed new regulations for crypto assets, aiming to create clearer pathways for issuers to raise capital under federal securities laws. The proposal, announced on August 18, introduces two new registration exemptions and a conditional safe harbor, which would exclude certain crypto assets from being treated as 'investment contracts'.

The SEC's goal is to provide digital asset entrepreneurs with clear guidelines to raise capital while maintaining core investor protections. The proposal builds on the Commission's earlier March 2026 interpretive guidance on federal securities laws and related transactions.

Two new exemptions are proposed, each with different raise limits and disclosure obligations: Exemption 1 allows for raises up to $5 million within a four-year period, while Exemption 2 permits raises of up to $75 million within a 12-month period. The safe harbor would apply once an issuer has completed or permanently ceased its promised managerial efforts under the original offering.

The proposal also addresses the question of when a token stops being classified as a security under the 'investment contract' test. Once specified conditions are satisfied, a crypto asset would no longer be deemed subject to an investment contract under either the Securities Act of 1933 or the Securities Exchange Act of 1934.