On 18 August 2026, the Securities and Exchange Commission voted to propose Regulation Crypto Assets (Reg CA), published as Release No. 33-11434. The proposal is at the proposed-rule stage; it creates no binding obligations until the Commission finalises the rule following a 60-day public comment period beginning from Federal Register publication. Reg CA would be the Commission's first purpose-built securities offering regime for a defined class of crypto instruments.
Reg CA defines a new instrument class called 'covered investment contracts': investment contracts in which investor returns depend substantially on a network or protocol that the issuer or an affiliated party is responsible for developing, assessed under a Howey-derived test in proposed Securities Act Rule 100. Two new exemptions from Securities Act registration would apply to covered investment contracts. The first exempts offerings of up to $5 million in aggregate over any four-year period. The second exempts offerings of up to $75 million per 12-month period, subject to expanded disclosure obligations including quarterly network-development reports. A conditional safe harbor removes the investment-contract classification once the issuer demonstrates completion of essential managerial efforts and files a Commission transition report. State law preemption attaches to all qualifying exempt offerings.
Crypto asset issuers and token developers structuring fundraising from U.S. investors are the primary subjects. The $5 million exemption serves early-stage token projects. The $75 million exemption targets larger fundraises without full SEC registration costs. Broker-dealers and alternative trading systems listing covered investment contracts gain compliance clarity once the underlying offering qualifies under Reg CA. State law preemption removes the need for separate blue-sky qualification across all 50 states for qualifying offerings.
The proposal leaves open several questions for the comment period. The boundary between a covered investment contract and a commodity under the Commodity Exchange Act remains unresolved, and the interaction between Reg CA's safe harbor and concurrent CFTC jurisdiction is not addressed in the release. The network-completion standard may be difficult to satisfy for protocols with decentralised governance. The SEC has requested comment on all three points specifically in the proposing release.
Licentium advises crypto asset issuers, token developers, and digital asset trading platforms on U.S. and international securities law requirements. We may assist with this matter directly or through our partner network. Work we undertake includes token offering structuring, securities classification analysis for digital assets, regulatory strategy for crypto businesses, and engagement with U.S. and non-U.S. regulators on crypto asset classification.
Source: SEC Press Release No. 2026-76, SEC Proposes New Regulation Crypto Assets, 18 August 2026