SEC proposes crypto safe harbor after CLARITY Act stalls in Senate

The SEC proposed new rules Tuesday that would give crypto companies a safe harbor from tokens being classified as investment contracts, stepping into a regulatory gap after Congress failed to advance a market structure bill before the August recess.

The agency's proposal creates what it called a "tailored securities offering regime" for certain investment contracts involving crypto assets, allowing entities to raise capital while preserving investor protections. Under the rules, crypto companies could issue up to $5 million in tokens over four years, or up to $75 million in a 12-month period, without the tokens being treated as investment contracts. Issuers would need to file financial statements and meet ongoing reporting requirements.

The proposed rules arrived days after the Senate failed to take up the Digital Asset Market Clarity Act, or CLARITY Act, a bill designed to clarify which federal agencies oversee crypto. Senate Majority Leader John Thune filed cloture on a motion to consider the bill, but the chamber broke for its August state work periods before holding a vote. Senators return in mid-September with only 14 session days before the November election, then 22 days before new members are sworn in in 2027.

SEC Chair Paul Atkins, in a statement, called legislation "indispensable" for durable crypto rules. "The SEC has and will continue to support Congress in delivering the CLARITY Act to President Trump's desk," Atkins said. He had been scheduled to speak at the Wyoming Blockchain Symposium on Tuesday but canceled amid the announcement.