SEC Proposes Crypto Rules With $5M, $75M Exemption Tiers

The proposal also addresses state-level friction. Securities issued under either exemption, along with certain secondary trades, would be exempt from state registration and qualification requirements. This preemption could simplify compliance for issuers operating across multiple jurisdictions.

A central feature is the conditional safe harbor provision. Under specified conditions, a crypto asset would no longer count as part of an investment contract. Investment contracts fall under the SEC's definition of a security.

The safe harbor becomes available once an issuer completes or permanently ends the managerial efforts it originally promised. Atkins explained that the rule "would also allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract." Once those obligations conclude, the underlying token could trade without ongoing securities classification.

This approach responds to a common industry complaint. Many crypto projects argued that assets remain classified as securities long after any centralized development work ends. Regulation Crypto Assets attempts to formalize when that classification should lapse.

Atkins also framed the rulemaking within a wider constitutional purpose, noting that Congress built securities laws to amplify opportunities for entrepreneurs within specific guardrails.

Public feedback will shape the final version before adoption. The comment window runs 60 days from the proposal's publication in the Federal Register.