On August 18, 2026, the SEC proposed new rules titled “Regulation Crypto Assets,” a tailored securities offering regime designed to create clear pathways for raising capital through certain investment contracts involving crypto assets. The proposal builds directly on the Commission’s March 2026 interpretation clarifying how federal securities laws apply to crypto assets and the transactions involving them. Read the full press release here.
For fund managers with digital asset exposure, this is one of the more consequential regulatory developments in recent years. Rather than forcing issuers of certain crypto asset-related investment contracts into traditional registration pathways, the SEC is proposing a purpose-built regime that balances capital formation with the investor protections at the core of the federal securities laws.
What Regulation Crypto Assets Proposes
The proposal centers on two exemptions from the registration requirements of the Securities Act of 1933, each tailored to investment contracts involving crypto assets.
The Two Fundraising Exemptions
The first is a one-time exemption permitting offerings of up to $5 million over a four-year period. The second permits offerings of up to $75 million during each 12-month period. Under both, issuers must make certain principles-based narrative disclosures available to investors. Issuers relying on the larger $75 million exemption face additional obligations, including providing financial statements and meeting ongoing reporting requirements.
The Conditional Safe Harbor
The proposed rules also introduce a conditional safe harbor from the term “investment contract” within the definitions of “security” under both the Securities Act of 1933 and the Securities Exchange Act of 1934. If the safe harbor’s conditions are met, a crypto asset would be deemed not subject to an investment contract for purposes of those definitions of a “security”. This addresses a question that has followed digital assets since the birth of the blockchain: how an asset can transition out of securities treatment once the network it supports is sufficiently developed.
Per SEC Chairman Paul S. Atkins, the safe harbor would apply once an issuer has completed or permanently ceased all essential managerial efforts it represented or promised it would undertake under an investment contract.
State Law Preemption
The proposal would also preempt state securities law registration and qualification requirements for offers and sales made under a Regulation Crypto Assets exemption, along with certain secondary market transactions. This is meaningful for issuers who have historically navigated a patchwork of state-level requirements.
Why This Matters for Fund Managers
The practical implications reach well beyond token issuers themselves. For managers running or evaluating crypto strategies, the proposal signals several shifts worth tracking.
Fundraising for crypto and blockchain projects could become materially easier and more predictable. Greater clarity around token classification and lifecycle treatment reduces one of the persistent uncertainties in the space. Compliance expectations for crypto funds and issuers become more defined, and institutional investors weighing digital asset allocations gain a clearer regulatory picture, which may increase their confidence in committing capital.
Taken together with the March 2026 interpretation, the proposal reflects a broader move away from regulation by enforcement toward a structured compliance framework. The SEC’s stated aims include reducing incentives for issuers to operate offshore and expanding investment opportunities for U.S. investors under stronger, more consistent protections.
What Comes Next
This is a proposal, not a final rule. The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register. Fund managers and their advisers have a window to assess the framework and, where appropriate, weigh in.
If adopted, Regulation Crypto Assets could stand as one of the most significant crypto regulatory developments in recent years. The bottom line: U.S. regulators are moving toward a more defined framework for digital assets, one that attempts to balance innovation and capital formation with investor protection.
Talk to Us
Richey May specializes in audit, tax, and accounting services for the alternative investments industry, with a dedicated crypto and digital asset practice. If you have questions about how the proposed Regulation Crypto Assets framework may affect your fund or issuer, reach out to Steve Vlasak, Business Development Partner, Alternative Investments Practice, at svlasak@richeymay.com.
