The U.S. Securities and Exchange Commission (SEC) has taken a landmark step by proposing its first permanent federal rule for digital asset fundraising, a framework that would allow crypto projects to raise up to $75 million without completing a full securities registration. The proposal, named the "Crypto Asset Regulation" under SEC guidelines, aims to establish two exemptions from the registration requirements of the Securities Act of 1933, specifically targeting certain investment contracts involving crypto assets.
A "startup exemption" would permit a project to conduct a single offering of up to $5 million within a four-year period, while a separate "funding exemption" would allow for offerings of up to $75 million within any 12-month window. Issuers relying on either exemption must provide narrative disclosures to investors based on principle-based requirements. Those utilizing the larger $75 million exemption would also be obligated to file financial statements and meet ongoing information disclosure standards.
For offerings made under these new exemptions, the proposed rules would supersede existing state-level securities registration and qualification requirements. The framework also introduces a conditional safe harbor regarding the definitions of "securities" under both the Securities Act of 1933 and the Securities Exchange Act of 1934. If an issuer has completed or permanently ceased all necessary development work previously represented or promised, the underlying crypto asset would no longer be classified as an investment contract, potentially removing it from SEC jurisdiction entirely.
SEC Chairman Paul Atkins described the proposal as "the most historic step yet in modernizing federal securities regulation for crypto assets," contrasting it with previous regulatory approaches. He characterized the past era as one where issuers and investors faced "a weaponized SEC that aggressively enforced against this asset class." Atkins noted that the SEC continues to support congressional efforts on the Digital Market Asset Clarity Act, also known as the CLARITY Act, which remains pending in the Senate with a procedural vote scheduled for September. The Chairman positioned this proposal as a bridge, stating the work is "too important" to wait for legislative completion.
Raphael Zagury, CEO of bitcoin treasury firm Twenty One Capital, emphasized that for an asset that can function as both a low-cost production commodity and loan collateral while serving as a foundation for financial products, the real constraint is not a lack of interest from institutional investors or developers, but the absence of clear regulatory rules. Zagury added that the SEC's initiatives and the U.S. Office of the Comptroller of the Currency's (OCC) signals regarding chartering are steps toward removing that constraint, noting that the direction aligns with the regulatory environment needed for a native bitcoin operating company to build on a solid regulatory foundation rather than being forced to develop without one.
The proposal arrives just as the U.S. Treasury initiated a 60-day public comment period on proposed rules for the GENIUS Act stablecoin framework, marking two major federal-level crypto regulatory rulemaking actions within the same week. The SEC's move concludes a busy week of crypto policy agenda in Washington D.C. Additionally, executives from Coinbase Global (COIN.US), Ripple (XRP.US), Polymarket, and Gemini (GEMI.US) are expected to attend a White House event on Wednesday, alongside traditional financial institutions including Nasdaq and the New York Stock Exchange. Former SEC Chairman Gary Gensler and acting Commodity Futures Trading Commission (CFTC) Chairman Michael Selig are also anticipated to participate.
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