A newly proposed SEC rule would let crypto startups raise capital without triggering securities registration requirements. The agency proposed a rule that would let companies sell digital assets without registering them as securities, as long as they stay under certain limits.
The rule has two tracks. A company could sell up to $5 million in digital assets over a four-year period, or up to $75 million over 12 months. The bigger exemption demands more: firms must submit financial records and fulfill recurring reporting obligations, all detailed in a proposal that runs more than 400 pages.
SEC Chairman Paul Atkins framed it as answering a question that has puzzled the blockchain world for years. "How can I raise capital to develop a crypto asset while I am still working to develop the network where it will be used," he posted on X.
The proposal also includes a safe harbor. If a company has fulfilled or given up on all the major management tasks it promised investors, its digital asset could fall outside the SEC's "investment contract" definition. That would potentially put it under the oversight of a different regulator instead.
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The timing is notable. A scheduled SEC session on the "Regulation Crypto" proposal was called off last week, and it's unclear whether the agency will still issue a separate exemption for trading securities in digital form.
The move comes as Congress has stalled on crypto legislation. Ethics requirements have become a sticking point after President Donald Trump reported $1.4 billion in 2025 income from crypto and memecoin businesses.
Given the legislative gridlock, the SEC's proposal is seen as a critical step toward providing regulatory clarity. The agency has also hinted at a separate exemption for trading digital securities, though that remains uncertain. With the White House meeting scheduled for Wednesday, the future of crypto regulation could hinge on these discussions.
The proposal is not yet a final rule, so it does not immediately change the legal landscape for digital asset issuers. The SEC will still need to weigh public comments, consider revisions, and decide whether to adopt the exemptions as written. That process leaves room for the White House meeting and industry feedback to alter the outcome before anything takes effect.
For everyday investors, the proposal could open the door to a wave of new digital assets. If the rule goes through, expect to see more crypto tokens from startups that previously had no clear path to market.
The SEC will accept public comments on the proposal until August 18, 2026, and the agency could make changes before finalizing it. A White House meeting on Wednesday with digital asset companies and financial leaders could shape what happens next.