SEC Proposes Regulation Crypto Assets With Two Registration Exemptions
The U.S. Securities and Exchange Commission on Tuesday proposed Regulation Crypto Assets, a rulemaking that would create two registration exemptions for offerings of certain crypto asset investment contracts: a one-time exemption for raises up to $5 million over four years, and a recurring exemption for raises up to $75 million in any 12-month period.
The SEC said the proposed rules are intended to clarify when crypto assets fall within the federal securities laws, reduce incentives for issuers to organize and operate offshore, and expand investment opportunities for U.S. investors with stronger, more consistent protections.
The proposal comes four days after the commission canceled a scheduled vote on related rulemaking; an SEC spokesperson attributed the delay to a scheduling issue. It is the second time this year the agency has pulled back from a planned crypto rule release, after a similar delay in May of its tokenized-stock “innovation exemption.”
Issuers under both exemptions would be required to provide principles-based narrative disclosures to investors. The larger, recurring exemption would additionally require financial statements and ongoing reporting. The proposal also includes a conditional safe harbor from the “investment contract” prong of the definition of a security under the Securities Act of 1933 and the Securities Exchange Act of 1934, available once an issuer has completed or permanently ceased the “essential managerial efforts” it had promised investors under the offering.
Separately, the proposed rules would preempt state securities law registration and qualification requirements for offerings made under the exemptions, as well as for certain secondary-market transactions.
The proposal builds on interpretive guidance the commission issued in March 2026 on how federal securities laws apply to crypto assets. That March guidance was itself an outgrowth of SEC Chair Paul Atkins’ “Project Crypto” initiative, unveiled in a November 2025 policy address.
The rulemaking arrives as Congress remains stalled on its own crypto market structure legislation. The Senate adjourned for its August recess without voting on the Digital Asset Market Clarity Act, the House-passed bill that would establish a broader federal framework for digital asset markets.
The bill’s main procedural hurdle, a cloture vote on the motion to proceed, is scheduled for Sept. 15. Sticking points include an ethics provision addressing government officials’ financial ties to crypto ventures, along with unresolved questions on stablecoin rewards and the division of authority between the SEC and the Commodity Futures Trading Commission. Even if the Senate clears that vote, any Senate-passed bill would still need reconciliation with the House version before reaching the president.
Why This Matters for Alts Sponsors and Advisers
None of this rulemaking targets nontraded real estate investment trusts, Delaware statutory trusts, or interval funds specifically. But the underlying question — how and whether interests in investment products can be represented and traded as blockchain-based tokens — touches directly on structures already used in this channel: continuous offerings, share repurchase programs, and efforts to build in greater liquidity for otherwise illiquid vehicles.
Some alts-adjacent firms are already moving in this direction. iCapital joined BNY, Nasdaq, and S&P Global in December 2025 in a $50 million investment in Digital Asset, the blockchain infrastructure firm behind the Canton Network, which iCapital said would form the foundation for tokenization of alternatives.
With proposed terms now on the table, due-diligence teams have more to work with than a hypothetical framework.
The public comment period will remain open for 60 days after the proposing release is published in the Federal Register.
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