US SEC proposes tiered crypto token rules

TLDR

The US Securities and Exchange Commission has proposed Regulation Crypto Assets, a tiered rule set for certain crypto token offerings that is still at the draft stage.

1. The proposal creates two fundraising tiers, with lighter rules for offerings up to 5 million and stricter disclosure requirements up to 75 million.
2. It mainly affects token issuers and compliant platforms, not day to day token holders, and does not cover secondary trading or DeFi.
3. A 60 day comment period and the separate CLARITY Act bill will decide how much of this framework actually becomes law.

Deep Dive

1. What The SEC Is Proposing

Regulation Crypto Assets is the SECs first dedicated rulemaking for crypto asset offerings, published on 18 August 2026 as a 400 plus page proposal. It introduces two key exemptions from full securities registration for qualifying token sales.

Under a startup exemption, projects could raise up to 5 million over four years with narrative disclosures but no audited financials. A fundraising exemption would allow up to 75 million in a rolling 12 month period, with tiered disclosure rules, including audited financials and ongoing reporting at higher levels of raise, according to the SEC focused explainer of Regulation Crypto Assets.

These exemptions apply only to "covered investment contracts" involving crypto assets and explicitly exclude tokens treated as commodities such as Bitcoin or Ethereum in that same analysis.

2. Who Is Affected And What Changes

The rules are aimed at token issuers, exchanges and custodians that operate within the US securities framework, rather than individual holders. Issuers that qualify for the exemptions could access US capital with clearer disclosure and reporting obligations, instead of relying purely on informal guidance.

A conditional safe harbor would allow a token to lose its "investment contract" status if the issuer certifies that all essential promised managerial efforts have permanently ceased, a concept highlighted in the detailed Regulation Crypto Assets breakdown. This borrows from court language in the Ripple case but depends on issuer self certification that the SEC can challenge.

Regulation Crypto Assets does not address key areas like secondary market trading, exchange registration, custody rules or market manipulation, so many current pain points for exchanges and DeFi remain outside its scope.

3. What To Watch Next

The SEC has opened a roughly 60 day public comment window, with feedback expected through about 20 October 2026, as noted in the Regulation Crypto Assets explainer. Industry responses will likely push for changes around DeFi, decentralization standards and state law preemption.

In parallel, the Digital Asset Market Clarity Act in Congress aims to split oversight between the SEC and CFTC and define when tokens become commodities, while the SEC proposal uses a different "managerial efforts" test. Coverage of the CLARITY Act and Regulation Crypto Assets together stresses that agency rules are easier to change than statute.

For crypto users and builders, the practical impact will depend on three outcomes: how the SEC revises the draft after comments, whether CLARITY passes, and whether future commissions choose to keep or roll back this framework.

Conclusion

The SECs tiered crypto token proposal signals a shift from pure enforcement to a more structured fundraising regime, but it is still only a draft and covers offerings rather than the full market stack. Until the comment process, CLARITY Act vote and follow on rulemakings play out, the main takeaway is that regulatory direction is changing, not that crypto tokens have suddenly become low risk or fully "defined" under US law.