The SEC closes public comment on Regulation Crypto Assets this Tuesday, October 20. Crypto projects have until then to weigh in on a framework that lets companies raise up to $75 million in any 12-month period by selling tokens. No equity dilution. No board seats given up. The proposal creates two fundraising exemptions and a safe harbor that lets qualifying projects eventually stop treating their tokens as securities.
The larger exemption permits recurring raises of up to $20 million or $75 million per year. Tier 2 requires audited US GAAP financial statements and ongoing reports. Offerings must be priced at a fixed rate. The issuer must be organized in the US. Non-accredited investors face a cap: 10% of the greater of their annual income or net worth.
The framework centers on pre-selling tokenized products, such as usage credits or platform access, rather than issuing equity or debt. The regulatory push comes days before Treasury's stablecoin comment period also closes, with both rules forming what SEC Chairman Paul Atkins has called clear pathways under federal securities laws.
Safe Harbor Ends Reporting Once Development Stops
Companies can file Form TR to certify that the investment contract has ended once they complete or permanently abandon their promised essential managerial efforts. The filing takes effect without SEC review. The issuer stops its reporting obligations. The safe harbor does not exempt projects from antifraud or antimanipulation rules, and its effect applies prospectively only.
Startup Path Takes $5 Million Over Four Years
A smaller startup exemption allows one-time raises of up to $5 million over four years per crypto asset. It requires narrative disclosure hosted on a public website. No financial statements are needed. Both exemptions preempt certain state securities registration requirements for qualifying offerings and specified secondary trades.
Agencies Fill Gap Left by Stalled Legislation
The proposal arrived after Congress stalled on the Clarity Act. That left crypto securities regulation to the SEC and commodity oversight to the CFTC. Traditional equity fundraising by crypto-focused firms continues under separate rules, while token sales under older frameworks remain subject to case-by-case SEC interpretation.
Comments are due by 11:59 PM Eastern on October 20 through the SEC's online form, by email to [email protected] with file number S7-2026-27 in the subject line, or by mail. The SEC has not set a timetable for final adoption. The proposal may be revised or withdrawn after the comment period closes.