SEC Unveils Two Exemptions and Token Safe Harbor for Crypto Assets

The US Securities and Exchange Commission (SEC) has proposed Regulation Crypto Assets, which includes two exemptions from registration under the Securities Act of 1933 and a conditional safe harbor related to the term investment contract.

The proposal pairs the safe harbor with new exemptions designed for certain investment contracts involving crypto assets. The startup exemption would permit offerings of up to $5 million during a four-year period, while the fundraising exemption would allow offerings of up to $75 million during each 12-month period.

Under both exemptions, issuers would provide principles-based narrative disclosures and remain subject to federal securities laws' antifraud and antimanipulation provisions. The proposal also preempts state securities-law registration and qualification requirements for offers and sales of securities issued under a Regulation Crypto Assets exemption.

The conditional safe harbor from the SEC would deem a crypto asset not to be subject to an investment contract if the issuer has completed or permanently ceased all essential managerial efforts it represented or promised it would take under an investment contract. Commissioner Hester M. Peirce described the safe harbor as a way for an issuer of an investment contract to delink a crypto asset from the investment contract with which it was once associated.

The SEC proposal follows the March 2026 interpretation addressing how federal securities laws apply to certain crypto assets and transactions involving crypto assets. The agency has presented the proposed rules and earlier interpretation as part of a tailored securities offering regime for crypto assets. Peirce invited public feedback on the proposal, citing that it may not fit every model.