The U.S. Securities and Exchange Commission's first-ever crypto-specific rulemaking — designated "Regulation Crypto Assets" — is now under review at the White House Office of Information and Regulatory Affairs, the final administrative checkpoint before publication in the Federal Register. SEC Ch...
"We want people really to experiment within that framework." — Paul Atkins, Chair, U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission's first-ever crypto-specific rulemaking — designated "Regulation Crypto Assets" — is now under review at the White House Office of Information and Regulatory Affairs, the final administrative checkpoint before publication in the Federal Register. SEC Chair Paul Atkins confirmed the submission on April 7, 2026, at an event co-hosted by Vanderbilt University and the Blockchain Association.
The proposal creates three tiered safe-harbor exemptions for token fundraising: a startup exemption capped at approximately $5 million over four years, a broader fundraising exemption permitting up to $75 million annually, and an investment-contract safe harbor that provides a rule-based off-ramp from securities classification once issuer managerial involvement ceases. It builds on the SEC-CFTC joint token taxonomy interpretation issued March 17, which formally classified 16 crypto assets — including Bitcoin, Ethereum, and Solana — as digital commodities outside securities law.
If finalized, Reg Crypto would replace the enforcement-by-litigation approach that defined the Gensler era with a structured compliance pathway. OIRA review typically runs 30 to 90 days; a public comment period of 30 to 60 days would follow. The earliest effective date, assuming no delays, falls in late Q3 2026.
Regulation Crypto Assets is a formal rulemaking under the Securities Act of 1933. It is not a no-action letter, a staff interpretation, or a speech — it is the SEC's first proposed rule specifically designed for crypto asset fundraising. The proposal addresses two problems that have plagued token issuers since the 2017 ICO boom: (1) when does a token offering constitute a securities transaction, and (2) how can issuers raise capital without triggering full registration requirements.
The proposal draws directly from Commissioner Hester Peirce's Token Safe Harbor concept, first introduced in February 2020 and updated in 2021. Under former Chair Gary Gensler, the proposal gained no traction. Chair Atkins credited Peirce's groundwork in his March 17, 2026, speech outlining the framework.
"We'll have reg crypto that we'll be proposing here shortly. It's in fact at OIRA right now," Atkins stated on April 7.
The framework creates three distinct pathways, each calibrated to different stages of project maturity and capital needs.
Tier 1: Startup Exemption ($5 million cap, 4-year window)
Early-stage crypto projects may raise up to approximately $5 million over a four-year period without full securities registration. Issuers must post "principles-based" disclosures publicly and file notices with the SEC. The exemption is non-exclusive, meaning projects can layer it with other existing registration exemptions under federal securities law.
The four-year window is intended to give networks time to reach sufficient decentralization — the point at which, under the framework's logic, the token may no longer constitute a security.
Tier 2: Fundraising Exemption ($75 million annual cap)
A separate, broader exemption permits issuers to raise up to approximately $75 million in any 12-month period. This tier carries stricter disclosure requirements, including a formal document covering financial condition and principles-based statements. Issuers filing under this path retain access to other registration exemptions.
For context, the $75 million threshold positions Reg Crypto between Regulation A+ ($75 million cap) and Regulation D (no cap but accredited-investor restrictions). The alignment with Reg A+ limits suggests the SEC views this as a parallel public-offering pathway for digital assets.
Tier 3: Investment Contract Safe Harbor
The third component establishes a rule-based standard for when a digital asset ceases to be treated as a security. According to Atkins, this occurs when the issuer completes or stops performing the key managerial efforts that were promised or implied during fundraising. Once that threshold is crossed, the token exits securities classification.
This is the most consequential element. It provides, for the first time, a defined off-ramp from securities status — a mechanism the industry has sought since the SEC's 2019 Framework for "Investment Contract" Analysis of Digital Assets.
Reg Crypto does not operate in isolation. It sits atop the SEC-CFTC Joint Interpretation issued March 17, 2026 — a 68-page formal agency action that established the first federal token taxonomy. The interpretation classifies crypto assets into five categories:
Sixteen assets received explicit digital-commodity designation: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, Dogecoin (DOGE), Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Polkadot (DOT), Hedera (HBAR), Litecoin (LTC), Bitcoin Cash (BCH), Shiba Inu (SHIB), Stellar (XLM), Tezos (XTZ), and Aptos (APT).
The digital-commodity designation means these assets are not securities. Staking, mining, and airdrops involving these tokens fall outside securities law. However, the interpretation is a formal agency action — not legislation. It can be modified by future administrations absent passage of the CLARITY Act, which cleared the House in July 2025 and the Senate Agriculture Committee in January 2026 but has not yet received a full Senate vote.
The move to Reg Crypto represents a measurable departure from the prior administration's regulatory posture.
Under Chair Gensler (2021–2025), the SEC brought over 100 enforcement actions against crypto companies. The agency treated enforcement as de facto rulemaking, using litigation to establish precedent in lieu of formal rules.
Under Chair Atkins, the SEC dismissed seven crypto enforcement actions between February and May 2025, including cases against Coinbase, Binance, Cumberland DRW, Consensus, Payward (Kraken's parent), Dragonchain, and Balina. Formal investigative orders declined 35% in 2025 compared to 2023. No-action letters — which provide companies legal reassurance — rose by more than 150% over the same period.
The SEC itself acknowledged the shift. In an April 2026 report, the agency stated that seven crypto firm registration cases and six "definition of a dealer" enforcement actions under the prior administration "identified no direct investor harm" and "produced no investor benefit or protection." Total enforcement actions against public companies fell approximately 30% in fiscal 2025 versus fiscal 2024.
Atkins characterized the reorientation: "Over the past year, the Commission has put a stop to regulation by enforcement and recentered its enforcement program on the Commission's core mission."
Alongside Reg Crypto, the SEC is preparing a separate "Innovation Exemption" — a regulatory sandbox that would allow eligible firms to issue and trade tokens for 12 to 36 months without full SEC registration. Originally targeted for January 2026, the exemption entered OMB review and has been delayed.
Atkins confirmed during an April 7 appearance that the innovation exemption is still forthcoming. "We want people really to experiment within that framework," he stated, adding that the design aims to treat startups and incumbent firms fairly.
The sandbox carries its own compliance requirements: principles-based disclosure, KYC/AML obligations, anti-fraud protections, limits on investor participation and assets under management, and regular performance and risk reporting to the SEC. Testing periods run 18 to 24 months.
The exemption is designed to cover tokenized stocks, DeFi services, and on-chain products — areas where the Innovation Exemption and Reg Crypto overlap but serve different functions. Reg Crypto addresses primary fundraising; the sandbox covers operational experimentation.
The text has not been published. All publicly available details derive from Atkins' March 17 speech, the April 7 comments, and the SEC-CFTC joint interpretation. The formal proposed-rule text may differ from these descriptions in material ways. Until the Federal Register publication, market participants are operating on speeches, not statute.
OIRA can modify the proposal. The 30-to-90-day review window allows OIRA officials to request changes, additional stakeholder consultation, or economic impact analysis. The final published version may not match what the SEC submitted.
Investor protection concerns persist. Traditional finance firms, including Citadel Securities, have argued that broad exemptions could weaken investor protections. The $5 million startup exemption requires only principles-based disclosures — significantly less rigorous than traditional IPO requirements. Whether this provides adequate protection for retail participants investing in early-stage token projects remains contested.
Legislative fragility. The token taxonomy and Reg Crypto are administrative actions, not law. A future administration could reverse both. The CLARITY Act would codify the commodity-vs.-security distinction into statute, but its Senate passage is not assured. The Senate markup is expected in late April 2026.
Interaction with state law is undefined. The proposal addresses federal securities law. State blue-sky laws, money-transmitter regulations, and other state-level requirements remain unaffected. Multi-jurisdictional compliance burdens may persist for issuers.
| Milestone | Estimated Date | |---|---| | SEC submits to OIRA | April 7, 2026 (confirmed) | | OIRA review period | 30–90 days (standard) | | Federal Register publication | May–July 2026 (estimated) | | Public comment period | 30–60 days after publication | | Comment analysis & final rule | Q4 2026–Q1 2027 (estimated) | | CLARITY Act Senate markup | Late April 2026 (expected) |
The timeline assumes no material delays from OIRA, no significant Congressional intervention, and no change in SEC leadership priorities.
Reg Crypto is the SEC's attempt to convert a decade of enforcement ambiguity into a structured regulatory pathway. The three-tiered exemption system addresses capital formation at different project stages, and the investment-contract safe harbor provides what the industry has lacked: a defined mechanism for tokens to exit securities classification.
The practical impact depends on execution. The rule text has not been published. OIRA review, public comment, and final rulemaking each introduce opportunities for modification. The legislative backstop — the CLARITY Act — remains pending.
What is measurable today: the SEC has shifted from bringing 100+ enforcement actions against crypto firms to proposing its first formal rulemaking for the asset class. Whether the framework achieves its stated goal of balancing innovation with investor protection will be determined by the specifics in the Federal Register filing and the public comment process that follows.