The U.S. Securities and Exchange Commission closed its 60-day public comment period on Regulation Crypto Assets (Reg CA) on October 20, 2026, collecting approximately 140 submissions from institutional investors, crypto-native firms, Wall Street trade groups, and legal scholars. The 400-page prop...
"As Congress works to establish a lasting regulatory framework, our new proposal, Regulation Crypto Assets, seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws." — Paul S. Atkins, Chairman, U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission closed its 60-day public comment period on Regulation Crypto Assets (Reg CA) on October 20, 2026, collecting approximately 140 submissions from institutional investors, crypto-native firms, Wall Street trade groups, and legal scholars. The 400-page proposed rule, published on August 18, represents the SEC's first standalone offering framework for crypto assets — a departure from nearly a decade of enforcement-led regulation.
Reg CA creates two new offering exemptions (up to $5 million and $75 million, respectively), a safe harbor that allows tokens to exit securities status entirely via a Form TR filing on EDGAR, and preemption of state blue sky laws for qualifying secondary trades. The proposal does not address exchange or broker-dealer registration for platforms trading covered investment contracts, leaving a structural gap that multiple commenters flagged.
Among the 140 respondents, the Hyperliquid Policy Center, the Securities Industry and Financial Markets Association (SIFMA), the Alternative Investment Management Association (AIMA), and SkyBridge Capital's Anthony Scaramucci submitted letters urging revisions on airdrops, buyback treatment, issuer consent, and investor-disclosure clarity. The SEC has indicated it will continue accepting comments past the deadline.
On August 18, 2026, the SEC voted to propose Regulation Crypto Assets, its first purpose-built offering framework for digital tokens sold through investment contracts. The Federal Register notice appeared on August 21 (Release No. 33-11434, File No. S7-2026-27).
The proposal addresses a narrow but consequential slice of the crypto market: tokens that were originally sold through investment contracts — where a purchaser invested money in a common enterprise expecting profits from a promoter's efforts — but where the token itself is not a security. For nearly a decade, the SEC relied on the Howey test and enforcement actions to regulate this space. Reg CA replaces that approach with a documented framework.
Chairman Atkins described the rule as "the most historic step yet to modernize federal securities regulations for crypto assets," while simultaneously noting that "legislation remains indispensable to enacting future-proofed rules of the road."
The rule's architecture rests on three pillars: two tiered offering exemptions, a safe harbor for exiting securities status, and federal preemption of state registration requirements.
Startup Exemption (Rule 200)
Issuers may raise up to $5 million over four years. No accredited-investor requirement applies. No per-investor cap exists. General solicitation is permitted. The issuer need not be organized in the United States.
Disclosure is principles-based and narrative. No audited financial statements are required. The issuer files a notice of reliance on new Form NOR, posts required disclosures on a public website free of charge, keeps them updated, and files a transition report on Form TR no later than four years after the notice.
Fundraising Exemption (Rules 300–304)
Two tiers mirror the structure of Regulation A:
| Feature | Tier 1 | Tier 2 | |---------|--------|--------| | Maximum raise | $20 million / 12 months | $75 million / 12 months | | Financial statements | Required | Required (audited) | | Ongoing reporting | Required | Required | | Investor accreditation | Not required | Not required |
Both tiers require public offering-level disclosure materials and ongoing reporting. Both are available only for covered investment contracts involving a crypto asset that is not itself a security.
Rule 400 creates a non-exclusive safe harbor under which a "covered investment contract" ceases to exist. The mechanism is self-executing: an issuer files Form TR on EDGAR certifying that it has completed or permanently ceased all essential managerial efforts it represented or promised to undertake. The filing takes effect immediately. No SEC review or approval is required.
Once the Form TR takes effect, the SEC treats the covered investment contract as having ceased to exist. The token is no longer subject to that investment contract for purposes of the "security" definitions in the Securities Act and Exchange Act.
The critical design choice: the SEC's test focuses on the issuer's conduct — whether essential managerial efforts have been completed or stopped — rather than the token's decentralization. The SEC is not proposing that a token becomes "not a security" because enough validators exist or ownership becomes sufficiently distributed. It is proposing that the contractual obligation ends when the work is done.
This is a measurable, document-filed transition. A project either has completed its promised roadmap or it has not. That binary is auditable in a way that "sufficient decentralization" is not.
Reg CA introduces a "qualified purchaser" definition that preempts state blue sky registration and qualification requirements for both primary offerings and secondary market transactions. The preemption is contingent: it applies only while the issuer remains current with Reg CA's disclosure and reporting obligations. If an issuer lapses, resale preemption can lapse with it.
According to the Davis Polk analysis, free transferability and blue sky preemption alone would not create a complete federal pathway for secondary trading. The proposal does not address whether platforms trading covered investment contracts must register as exchanges, brokers, or dealers. States retain antifraud authority.
This partial preemption creates a two-speed market. Tokens with compliant issuers can trade across state lines without additional registration. Tokens whose issuers fall behind on reporting cannot.
The SEC received approximately 140 submissions by the October 20 deadline, including six anonymous filings. Notable respondents and their positions:
Hyperliquid Policy Center (October 19, 2026): Filed a supportive letter with five proposed refinements. Requested that the SEC: (1) codify the March 2026 airdrop analysis into the final rule text, (2) address resales and intermediary status directly, (3) allow projects to certify that their token was never tied to an investment contract, (4) distinguish algorithmic token buybacks from insider repurchases, and (5) make federal preemption of state laws durable.
SIFMA (October 19, 2026): Focused on tokenized securities rather than the broader Reg CA framework. Requested that the SEC replace the current 30-day objection window for tokenized stocks on Tokenized Securities Venues with a 90-day period tied to confirmed receipt, and require affirmative issuer consent before third-party tokenized stocks trade.
AIMA: Urged the SEC to require issuers to "distinguish utility or economic exposure from ownership, redemption, cash-flow and contractual rights." Recommended tailored event reporting and clearer treatment of information that is "genuinely unavailable."
MiCA Crypto Alliance: A European compliance consortium that expressed overall support for the revised disclosure requirements while emphasizing the need for standardized definitions of terms across jurisdictions.
The SEC indicated it will continue accepting comments after the deadline, according to Crypto Briefing reporting from October 20.
Several structural questions remain unanswered:
Exchange and broker-dealer registration. Reg CA creates an offering and disclosure framework but does not establish a registration pathway for platforms facilitating secondary trading. A token may be freely transferable under federal law, but the venue where it trades may still face unresolved regulatory status.
DeFi protocols. The proposal's architecture assumes an identifiable issuer who files forms, maintains a website, and publishes disclosures. Decentralized protocols with no legal entity, no named promoter, and no ongoing managerial efforts do not fit neatly into this structure.
Interaction with the GENIUS Act. The stablecoin legislation working through Congress creates its own compliance stack. The intersection between Reg CA's token-level framework and GENIUS Act's stablecoin-level framework has not been addressed.
Cross-border coordination. While the MiCA Crypto Alliance commented, the proposal does not establish mutual recognition or equivalence frameworks with the EU's Markets in Crypto-Assets Regulation (MiCA), which took full effect in December 2024.
Reg CA's economic significance lies in its potential to redirect capital formation costs. Under the current enforcement-led regime, crypto projects raising capital face three categories of cost: legal uncertainty (which inflates counsel fees and limits institutional participation), state-by-state compliance (which fragments markets), and the absence of a documented "exit" from securities status (which creates permanent regulatory overhang on secondary liquidity).
The startup exemption's $5 million / four-year pathway with no accreditation requirement and minimal disclosure could reduce early-stage fundraising costs materially for projects that currently raise through SAFTs, SAFEs, or offshore structures. The question is whether the four-year Form TR deadline creates a workable timeline for protocols whose development roadmaps typically extend five to seven years.
The $75 million fundraising exemption with audited financials brings crypto offerings closer to the disclosure standards of traditional Regulation A+ raises. This is structurally aimed at projects seeking institutional capital — where the cost of compliance is justified by access to deeper pools.
The safe harbor's economic value is in secondary-market liquidity. A token that has exited securities status via Form TR can theoretically trade without the regulatory drag that limits exchange listings, market-maker participation, and custodial access today. Whether that theoretical liquidity materializes depends on the exchange and broker-dealer questions the proposal leaves open.
Regulation Crypto Assets represents the SEC's first attempt to replace enforcement-by-litigation with a documented framework for crypto capital formation. The 140-comment record signals broad engagement, and the substantive nature of the revisions requested — from Hyperliquid's five-point refinement list to AIMA's disclosure concerns — suggests the final rule will undergo material changes before adoption.
The proposal's strongest feature is its measurability. Form TR's self-executing exit from securities status, based on completion of promised work rather than subjective decentralization assessments, introduces an auditable standard where none existed. Its weakest feature is incompleteness: by addressing offerings and disclosure without addressing trading-venue registration, the SEC has built half of a market framework.
The next phase — adoption timeline, potential revisions, and the interaction with Congressional legislation including the GENIUS Act — will determine whether Reg CA functions as the permanent rule Chairman Atkins described, or as a transitional document overtaken by statute.