SEC proposes $5m and $75m crypto fundraising routes and a conditional safe harbour

The SEC’s proposed Regulation Crypto Assets would give issuers two tailored ways to raise capital under certain investment contracts involving crypto assets: a one-time exemption for up to US$5 million over four years and a larger exemption for up to US$75 million in each 12-month period. The proposal links registration relief to disclosure and preserves federal antifraud and antimanipulation rules.[1][2]

The proposal builds on the March SEC and CFTC interpretation that a non-security crypto asset can be offered or sold as part of an investment contract. That distinction connects the two parts of this rulemaking: conditions for the capital-raising transaction, and a separate conditional safe harbour addressing when the asset is no longer subject to that investment-contract relationship.[5][2]

Two exemptions with different disclosure burdens

The two ceilings have different consequences for funding plans: the smaller amount is the total for its four-year pathway, while the larger limit is measured in each 12-month period. Continuing reporting under the larger route would give investors information after the initial offer as the issuer’s work progresses.[2][1]

The safe harbour addresses the end of the investment contract

The safe harbour would apply after the issuer has completed or permanently ceased all essential managerial efforts it represented or promised under the covered investment contract, provided the other conditions are satisfied. The result would concern the investment-contract limb of the Securities Act and Exchange Act definitions of a security. It therefore turns on the promised work and the rule’s conditions, rather than a token’s trading price or continued network activity alone.[2][3]

Secondary transactions and state registration also matter

The proposal would pre-empt state registration and qualification for covered exempt offers and sales and certain secondary transactions. That addresses the registration route; state antifraud authority and other applicable law remain relevant. For intermediaries, the secondary-market provisions could be as consequential as the issuer’s choice of primary fundraising exemption.[2][1]

Comments are due on 20 October 2026. Issuer feedback can address how the ceilings relate to development costs, how technical and economic disclosures should work and what evidence establishes the end of promised managerial efforts. The Commission’s eventual decision, including any transition and filing instructions, will determine whether and how the proposed pathways become available.[1][2][4]

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