US SEC outlines tiered token offering rules

TLDR

The US SEC has proposed Regulation Crypto Assets, a rule that creates tiered exemptions for certain crypto token offerings based on how much money projects raise.

1. The proposal introduces a startup exemption up to 5 million dollars and a fundraising exemption up to 75 million dollars, each with different disclosure requirements.
2. It adds a conditional safe harbor that can strip a token of investment contract status once the issuer truly stops running the project, plus federal preemption over many state rules.
3. The rules are only a draft, with a roughly 60 day comment period, and do not fully resolve DeFi or secondary trading, so market structure remains partly uncertain.

Deep Dive

1. New Tiered Offering Framework

On 18 August 2026, the SEC published a 400 plus page Regulation Crypto Assets proposal focused on crypto asset offerings.

It outlines two main exemptions from traditional Securities Act registration for covered investment contracts involving crypto assets:

1. Startup exemption: up to 5 million dollars raised over four years, using narrative disclosures but no audited financials.
2. Fundraising exemption: up to 75 million dollars in any 12 month period, with tiered disclosures (no audits below 20 million dollars, audited financials and ongoing reporting above).

Major tokens treated as commodities, such as Bitcoin and Ethereum, are outside this specific framework and would remain under other regimes.

2. Impact On Issuers And Markets

For token issuers, the exemptions define compliance burden by size of raise, which can influence how much capital they target and how they structure launches.

The proposal also includes a conditional safe harbor. If an issuer can certify that it has permanently stopped all essential managerial efforts it promised to undertake, the token may stop being treated as an investment contract, echoing aspects of the Ripple case but relying on issuer claims that the SEC can challenge.

Regulation Crypto Assets preempts many state securities laws for covered offerings, reducing multi state friction but potentially weakening some local protections. It addresses offerings, not secondary trading, exchange registration, or market manipulation, so exchanges and DeFi protocols still face separate and sometimes unclear rules.

3. What To Watch Next

The proposal opens a comment window of roughly 60 days, expected to run into October 2026, during which projects, exchanges, and advocacy groups can push for changes.

In parallel, the Digital Asset Market Clarity Act is stalled in the Senate, so real world practice may lean on agency rulemaking like Regulation Crypto Assets rather than durable legislation. Future SEC commissions could revise or repeal the rules, making them less stable than a statute.

Key signals to watch are: a) how strictly the SEC defines covered investment contracts, b) whether DeFi and secondary markets get separate rulemakings, and c) whether Congress eventually passes a broader market structure law that could override parts of this framework.

Conclusion

Regulation Crypto Assets is the SECs most concrete attempt so far to give crypto token offerings a bespoke, tiered rulebook tied to fundraising size and issuer behavior.

If it is adopted close to its current form, smaller projects could gain clearer paths to compliant fundraising, while larger issuers face more traditional disclosure duties and ongoing reporting.

Until legislation catches up, US crypto markets will operate in a regime where much of the clarity is supplied by agency rules that can change with political cycles, so projects and investors should track both the comment process and the fate of broader market structure bills.