U.S. SEC proposes first major crypto rule in surprise announcement

The U.S. Securities and Exchange Commission has made its first major foray into crypto regulation, issuing a proposed rule meant to clear a path for offering crypto offerings without triggering certain regulatory demands as securities.

The agency action on Tuesday is an opening step to establish "Regulation Crypto Assets" as a first permanent rule governing digital assets — a particularly meaningful development after Congress has so far fallen short in passing a crypto market structure law. The issuance — distinct from the SEC's separate crypto initiative known as the "innovation exemption" for tokenized securities, which hasn't yet emerged — had been unexpected after the agency had cancelled an August 14 meeting meant to propose the same rule.

“Today, we are charting a new course with a package of exemptions that would facilitate capital formation and allow crypto asset innovation to flourish in the United States in the years ahead,” said SEC Chairman Paul Atkins in a statement.

The proposal includes two tracks for crypto offerings — a one-time “startup” offering of up to $5 million in a four-year period, and another more restrictive avenue for offerings of up to $75 million in each one-year period, but it comes with more disclosure requirements.

For the startups, they’d have to put out public filings at the start and the end of that period and make other disclosures to investors. For the other method of fundraising, they would also have to submit public filings of offering materials but would also have to disclose their financial condition and would be subject to ongoing reporting requirements akin to certain investment-contract rules at the agency. Their activity would also fall under anti-fraud and manipulation rules within the securities laws.

"Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. In addition, issuers under the second exemption would be required to provide financial statements and be subject to ongoing reporting requirements," according to a description from the regulator.

The proposed rule would also let certain crypto assets avoid having to check the box as "investment contracts" under securities law.

"In line with the commission’s earlier interpretative guidance, this proposal would also allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract," Atkins said.

So, once the management is done and conditions are met, the investment contract is no longer considered a potential security.

The SEC is inviting the public and industry to weigh in with comment letters for 60 days, after which the input is typically reviewed for at least a few months as the agency writes the final version of the rule. The commission had cancelled the previous meeting at the last minute, citing an "unforeseen scheduling issue."

This development comes as the Senate is still engaged in a last-ditch effort to use the final three weeks of floor time next month to finish the Digital Asset Market Clarity Act. After that period, Congress will be on a lengthy recess until after the midterm elections.

"Given the progress made in Congress to date on market structure legislation, let me be clear up front: Legislation remains indispensable to enacting 'future-proofed' rules of the road that are durable enough to protect the work we are undertaking today from being unwound by a future rogue regulator," Atkins said.

The industry welcome the news from the SEC on Tuesday, even as it continues to lobby the Senate for a permanent law.

Digital Chamber CEO Cody Carbone noted that the SEC acknowledged a number of suggestions from crypto firms in its proposed Reg Crypto language. He said his organization “will continue to work with the SEC to ensure consumers and the digital assets industry can thrive onshore in the U.S.”

UPDATE (August 18, 2026, 19:18 UTC): Adds comment from SEC Chairman Paul Atkins.
UPDATE (August 18, 2026, 20:25 UTC): Adds comment from Digital Chamber’s CEO.