SEC proposes a $75m crypto exemption

For nine years the question of whether a token is a security has been argued one enforcement action at a time. On August 21 the Securities and Exchange Commission proposed answering it with numbers instead. Regulation Crypto Assets, published at document 2026-17183 under RIN 3235-AN38, would build what the Commission calls a tailored offering regime for certain investment contracts involving crypto assets.

The structure is two exemptions from the registration requirements of section 5 of the Securities Act of 1933. The first permits offerings of up to $5 million during a four-year period. The second permits offerings of up to $75 million during each 12-month period. Both are conditioned on disclosure: issuers must make what the Commission describes as principles-based narrative disclosures available to their investors.

The second exemption carries the heavier burden. Issuers relying on it must provide financial statements and are subject to ongoing reporting requirements. That is the difference between a one-time disclosure and a continuing obligation, and it is where the $75 million tier starts to resemble a small registered offering.

Neither exemption is a release from liability. The proposal states that issuers relying on them remain subject to the antifraud and antimanipulation provisions of the federal securities laws. Whatever else changes, the Commission is not proposing to give up its fraud jurisdiction.

The provision with the longest reach is the third one. The proposal would create a conditional safe harbour from the term investment contract in the definitions of security in both the 1933 Act and the Securities Exchange Act of 1934. If the conditions are satisfied, a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions.

That phrase has carried the weight of the entire argument since the Commission's 2017 report on decentralised autonomous organisations. Firms have spent years constructing token designs around it, and litigation has turned on how a promoter's continuing efforts should be characterised years after issuance. A stated set of conditions changes the nature of that work from prediction to compliance.

What the proposal does not do is settle the classification question in the abstract. It creates a route by which an asset can be treated as outside investment contract analysis if specified conditions hold. Assets that do not meet those conditions are where the old argument continues.

The comment period closes on October 20, 2026. Rulemaking of this size rarely emerges in the form it was proposed, and the two most consequential elements — the conditions attached to the safe harbour and the reporting obligations at the $75 million tier — are the ones most likely to move between proposal and adoption.

For issuers the practical question is not whether the regime is generous. It is whether the conditions can be met by a token that is already trading, or only by one designed against the rule from the beginning. That distinction will decide how much of the existing market the regulation actually reaches.