SEC Proposes New Framework for Regulating Crypto Assets with Conditional Exemptions and Safe Harbor

The U.S. Securities and Exchange Commission (SEC) has proposed a new framework for regulating crypto assets, titled Regulation Crypto Assets. This proposal aims to provide clarity on the regulatory landscape for Web3 projects in the U.S., even in the absence of the long-awaited CLARITY Act.

On August 18, 2026, the SEC issued a notice of proposed rulemaking, which outlines a tailored framework specifically engineered for 'covered investment contracts.' The proposal introduces two conditional offering exemptions, custom disclosure standards, and a conditional safe harbor from the term 'investment contract.'

The Regulation Crypto Assets proposes four key rules: two exemptions (Rule 200 and Rules 300-307) that allow token offerings up to $5 million and $75 million respectively, a safe harbor (Rule 400) that allows issuers to rely on it by certifying that managerial efforts have ceased, and state law preemption (Rule 500). The proposal also emphasizes the importance of technical verification in meeting legal compliance requirements.

The proposed rules require token projects to provide audited financial statements, maintain free, publicly accessible narrative disclosures, and submit Form NOR notice prior to commencing an offering. Additionally, issuers must disclose material security aspects of their network, including a link to source code URL if the code is public.