The SEC's Token Offering Proposal: Two Exemptions, One Safe Harbour, Nothing in Force
Regulation Crypto Assets would exempt token offerings of up to $5 million over four years, or $75 million a year, from registration. Comments close 20 October. None of it is law yet.
By Staff, Presale Press
A proposed rule titled Regulation Crypto Assets appeared in the Federal Register on 21 August 2026. Before it is quoted into something a reader mistakes for permission, the shape of the document is worth stating: it is a proposal by the Securities and Exchange Commission, open for public comment until 20 October 2026, carrying release numbers 33-11434 and 34-106150 under file number S7-2026-27. Nothing in it has legal effect today.
What it would do, if adopted as proposed, is open two routes by which an issuer could offer crypto-asset investment contracts without registering them. The first is modest: up to $5 million over a four-year period. The second is not: up to $75 million in each twelve-month period, with financial statements and continuing reporting obligations attached. Both routes would rest on what the Commission describes as principles-based narrative disclosure — prose, in other words, written by the issuer and tailored, the release says, to the issuer, the crypto asset and the network or application attached to it. The release also sets out a conditional safe harbour under which a crypto asset would be deemed not to be subject to an investment contract, for the purposes of the statutory definitions of “security”, where the stated conditions are satisfied.
A desk that reads term sheets for a living will notice two things about that architecture. Disclosure is not diligence: a narrative document supplied by the seller is a description, and the proposal preserves the antifraud and antimanipulation provisions of the federal securities laws precisely because descriptions can be false. And an exemption is an exemption from registration, not a certification of anything else. A sale conducted under the smaller tier would carry no financial statements at all, no continuing reports, and no supervisory view whatever on whether the thing being sold is worth the asking price.
Which brings us to the phrasing to watch for between now and whenever a final rule arrives, if one does. “SEC framework.” “Compliant under Regulation Crypto Assets.” “Filed with the SEC.” Expect all three on sale pages long before there is a rule to be compliant with, and read each of them as a claim about paperwork rather than about merit. This desk has made the same point about Europe’s equivalent ornament, where a register entry proves a document was lodged and not one thing more — see our note on what the ESMA register actually says. The failure mode travels well; only the accent changes.
The proposing release is public and costs nothing to read. The Federal Register entry carries the text, the docket and the comment deadline. We cover this market; we do not participate in it, and we would rather readers took the date from the source than from a promoter’s summary of it.
The usual reminder: a rule that does not yet exist protects nobody, these instruments remain high risk, and nothing written here is financial advice.