For years, crypto companies argued they were being forced to play by rules written for stocks and bonds, with no path that actually fit how tokens work. On Tuesday the Securities and Exchange Commission offered its answer. The agency proposed Regulation Crypto Assets, a framework that would carve certain token offerings out of the usual securities registration requirements and hand the industry something it has lobbied hard to get.
SEC Chair Paul Atkins, appointed under President Trump, framed the plan as a way to give crypto founders a clear route to raise money under federal law. It is the clearest sign yet of how far the agency has turned since Gary Gensler’s tenure, when the SEC pursued crypto firms through the courts. Under its current Republican majority, the commission has already rescinded strict crypto accounting guidance and dropped cases against Coinbase, Binance, and others.
What the proposal actually does
Two exemptions sit at the center of it. A “startup” track would let a project raise up to $5 million in tokens over four years with light, plain-language disclosures. A larger “fundraising” track would permit up to $75 million every 12 months, though with more strings attached: financial statements and ongoing reporting. Either way, issuers still have to tell investors certain things before taking their money.
The more consequential piece may be the safe harbor. If a project certifies that it has finished or permanently abandoned the managerial work it promised investors, its token could stop being treated as part of an investment contract, and effectively step outside the SEC’s definition of a security. For a maturing network, that is the exit ramp the industry has chased for years. It also raises an obvious question: how do regulators tell a genuinely decentralized network from one that only claims to be?
Not everyone is applauding
Industry groups welcomed the move fast. The Blockchain Association called it an overdue step toward workable rules, and the Digital Chamber said it would keep working with the SEC to keep crypto business onshore.
Critics look at the same lighter disclosure rules and see a gap waiting to be exploited. Democratic senators including Elizabeth Warren have warned that loosened exemptions could chip away at investor protections built over decades, and a former SEC chief accountant argued that a similar framework could open the door to fraud on the scale of FTX. A $5 million raise backed by little more than a whitepaper, the worry goes, is a legal pathway for honest builders and bad actors alike.
Rules built on shifting ground
There is a catch hanging over all of it. The industry has spent hundreds of millions pushing for actual legislation, and that effort is stuck in the Senate. So the SEC is filling the vacuum with its own rulemaking. The trouble, as many executives quietly concede, is that what one commission writes another can rewrite. Atkins himself has said legislation is still needed to make these rules durable enough to survive a future regulator.
The proposal now goes out for 60 days of public comment once it lands in the Federal Register. After the lawsuits, the enforcement actions, and years of arguing over what a token even is, the industry finally has rules on paper. Whether they last long enough to matter is another question entirely.
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