Summary
- Fundraising pathways under existing Federal securities laws were not designed with crypto assets and blockchain in mind, leaving crypto entrepreneurs with unclear and unworkable options and investors without information most relevant to investing in a crypto asset.
- To address these gaps, the Securities and Exchange Commission (SEC) proposed Regulation Crypto Assets (Reg Crypto Assets), providing defined pathways for crypto projects to raise money in the United States through the offer and sale of crypto assets and additional clarity as to when an investment contract security involving a crypto asset ceases to exist.
- CCI believes Reg Crypto Assets is a critical step toward regulatory clarity, protecting investors, and onshoring innovation.
- CCI offered targeted recommendations to advance these goals, including by encouraging the Commission to: Raise exemption limits; Set clear approval timelines for offering statements; Codify key 2026 interpretive guidance; Adopt a substance-over-form safe harbor; Clarify that routine post-functional network maintenance services are not essential managerial efforts; and Ensure crypto assets sold under a Reg Crypto Assets exemption may trade on the secondary market.
Overview
On August 18, 2026, the SEC proposed Reg Crypto Assets, providing two clear pathways for crypto projects to raise funds by offering or selling crypto assets as part of investment contracts:
- A startup exemption for early stage projects up to $5 million during a four-year period, subject to principles-based disclosures;
- A fundraising exemption of up to $75 million in each 12-month period, subject to principles-based disclosures, financial statements, ongoing reporting.
The proposal would also establish an investment contract safe harbor clarifying when a crypto asset stops being tied to an investment contract.
Importantly, the proposal also provides preemptive relief from State securities registration and qualification requirements, thus avoiding a fragmented 50-state framework that would undermine the utility of the Federal, uniform, purpose-fit framework.
Why is this needed?
Innovators and entrepreneurs have remained without a clear, workable pathway under the Federal securities laws to raise capital by offering or selling crypto assets to U.S. investors. Even in the limited instances where registered offerings were possible, or an exemption applied, existing requirements have failed to provide investors with the information most important to investments in projects built on blockchain technology and where an asset’s value becomes increasingly determined by market forces rather than the essential managerial efforts of an issuer over time.
Given these challenges, builders, capital, and talent have migrated to jurisdictions with clearer rules. Indeed, the U.S. share of global crypto developers fell from 38% to 19% over nearly a decade, while non-U.S. exchanges accounted for roughly 92% of global centralized exchange trading volume in 2025. Once companies establish their operations and infrastructure abroad, attracting that talent and investment back to the United States becomes increasingly difficult.
How does Reg Crypto Assets help U.S. entrepreneurs and innovators?
As noted above, Reg Crypto Assets offers two targeted pathways for entrepreneurs to raise funds. The startup exemption offers a streamlined pathway for early-stage projects to raise up to $5 million for offers and sales of crypto assets as part of an investment contract. This process is significantly streamlined compared to existing registration requirements for traditional securities. To rely on the startup exemption, issuers must file notice with the SEC and make principles based disclosures publicly available.
The fundraising exemption is modeled in part on Regulation A and has two tiers. Tier 1 allows offerings of up to $20 million in a 12-month period. Tier 2 allows offerings of up to $75 million in a 12-month period and requires audited financial statements. Issuers must publicly file offering materials with the same principles-based narrative disclosures required under the startup exemption, plus a discussion of their financial condition and financial statements. Issuers are also subject to ongoing reporting requirements. Importantly, the SEC must qualify the offering statement.
The proposed safe harbor also provides the market, issuers, and investors greater clarity regarding when an investment contract involving a crypto asset ceases to exist. This safe harbor is particularly important in crypto where an issuer may initially engage in essential managerial efforts that drive the value of the offered crypto asset, but over time, the crypto asset’s value is determined by market forces and its utility on a functional crypto network. This safe harbor, appropriately structured, will ensure issuers and investors have clarity regarding the regulatory classification and treatment of crypto assets.
How does Reg Crypto Assets Protect Investors?
To rely on a Reg Crypto Assets exemption, issuers must satisfy purpose-fit disclosure requirements, tailored for the unique risks and attributes of crypto asset and its associated network. This purpose-fit disclosure framework will ensure investors can make the most informed investment decisions by eliciting information covering the issuer’s plan for development, the subject crypto asset’s supply, lockup periods, distribution, and release schedules, token allocations and holdings by related persons, its related network’s governance mechanisms and permissions, source code and security, and project-specific risk factors. This is a significant improvement from status-quo reporting requirements, which do not contemplate such purpose-fit disclosures. Further, the proposal makes clear that the SEC’s anti-fraud and anti-manipulation authorities continue to apply.
Why is preemption important?
Crypto asset offerings are typically interstate or global in nature. State-by-state registration and qualification requirements would impose unworkable burdens on issuers, raise compliance costs, and create fragmented, jurisdiction-by-jurisdiction obligations that are ill-suited to the borderless nature of crypto asset markets. Accordingly, CCI strongly supports the SEC retaining preemptive relief in the final rule.
CCI’s Recommendations
CCI applauds the Commission’s thoughtful proposal to Regulation Crypto Assets. We also offered targeted recommendations to advance the proposal’s overarching goals. The Commission recognizes that the covered crypto assets are not themselves securities, yet market participants will still need clarity on whether they can resell assets bought or received under the Reg Crypto Assets exemptions outside of registered securities venues. CCI looks forward to working with the Commission to provide further regulatory clarity regarding the circumstances under which purchasers of crypto assets pursuant to Reg Crypto Assets can sell those assets on the secondary market.
CCI also urges the commission to raise fundraising limits to further promote capital formation in the U.S. and bring this activity under Reg Crypto Asset’s regulatory perimeter. A clearly defined timeframe for the Commission to qualify an offering statement under the fundraising exemption would also ensure issuers have clarity on when tokens may go to market, and avoid bottlenecks for SEC review.
CCI also urges the Commission to clarify that certain activities involved in maintaining a blockchain network are not essential managerial efforts. This includes software upgrades and ongoing network maintenance. While the SEC recognizes this distinction in the proposal, CCI recommends codifying it and providing non-exclusive examples to ensure that continued development does not create uncertainty about an investment contract’s status.
Further, CCI appreciates the Commission providing that issuers can rely on other exemptions or safe harbors under existing securities laws (e.g., Reg D) in addition to Reg Crypto Assets. To ensure issuers are able to take advantage of this non-exclusivity, CCI encourages the Commission to provide additional guidance regarding the use of Reg Crypto Assets’ exemptions alongside other offering pathways.
CCI remains committed to serve as a resource to the Commission as it continues to develop rules that provide clarity, protect investors, and unlock innovation onshore. A full list of recommendations can be found in CCI’s comment letter here.
