SEC proposes new rules governing crypto asset issuance, with plans to provide an exemption pathway for some projects.

The U.S. Securities and Exchange Commission (SEC) has proposed a new regulatory framework dubbed "Regulation Crypto Assets," designed to offer a more flexible compliance path for digital asset financing—balancing investor protection with lower regulatory hurdles for certain crypto projects. SEC Chairman Paul Atkins described the rule as a "custom-tailored issuance mechanism" aimed at supporting crypto innovation within the securities law framework and modernizing the regulatory system for the digital asset market. Per the proposal, the SEC plans to roll out a "Startup Exemption," allowing digital asset issuance projects with financing of up to $5 million to be exempt from registration requirements under the 1933 Securities Act for four years; it will also introduce a "Fundraising Exemption," enabling issuances of up to $75 million to qualify for exemption for one year. Additionally, the framework includes a safe harbor mechanism: if a digital asset meets relevant criteria and the project team "ceases ongoing managerial efforts," the asset may no longer be classified as a security going forward. The proposal arrives as the U.S. Congress’s CLARITY Act—legislation focused on the structure of the digital asset market—has stalled. The SEC noted that the framework will align with digital asset regulatory guidance previously issued by the SEC and the Commodity Futures Trading Commission (CFTC). SEC Commissioner Hester Peirce stated that the proposal is only the first step toward a "clear, reasonable, and enforceable" crypto regulatory framework, with a 60-day public comment period.