The Securities and Exchange Commission released proposed rulemaking S7-2026-27, titled Regulation Crypto Assets, on 18 August 2026. The proposal proceeds under the Securities Act of 1933 and marks the Commission's first bespoke exemption regime for crypto investment contracts, replacing the prior approach of regulating through enforcement actions and informal guidance issued since 2017.
The proposal invokes Sections 2(a)(1), 3, 4, and 19 of the Securities Act of 1933, and Sections 10 and 12 of the Securities Exchange Act of 1934. Two exemption tiers are proposed. Tier 1 permits offerings capped at USD 5 million over a four-year period, requiring principles-based narrative disclosures. Tier 2 permits offerings up to USD 75 million per 12-month period and requires audited financial statements and ongoing periodic reporting. A separate investment contract safe harbor removes securities law obligations for a token once the issuer certifies to the Commission that all essential managerial efforts promised under the contract have ceased and satisfies additional specified conditions.
Token issuers, digital asset project developers, and crypto-native capital raisers gain a defined federal pathway to offer investment contracts without full Exchange Act registration. Tier 2 issuers face scaled disclosure obligations requiring auditor engagement and outside securities counsel. The safe harbor gives protocol developers a mechanism to exit securities law jurisdiction once on-chain decentralization reaches the certified threshold, reducing long-term compliance overhead for mature networks.
The comment period closes 60 days after Federal Register publication. The proposal does not address secondary market trading of tokens issued under the new exemptions, leaving broker-dealer and exchange registration requirements for such tokens open. Dissenting commissioners questioned whether the safe harbor decentralization certification standard is workable and whether the Tier 1 disclosure obligations give investors adequate information on token economics.
Licentium may advise on matters arising from this development or introduce clients to qualified counsel in our partner network. Work we undertake includes crypto asset securities analysis, token offering structuring under SEC exemptions, investment contract classification, and digital asset regulatory advisory.
Source: SEC Press Release 2026-76, Regulation Crypto Assets Proposing Release, 18 August 2026