U.S. SEC Releases Proposed ‘Reg Crypto’ Framework for Crypto Investment Contracts

The U.S. Securities and Exchange Commission (SEC) has released the long-awaited ‘Reg Crypto’ framework to regulate certain investment contracts involving crypto assets. This comes as the CLARITY Act stalls, with the regulator moving to provide clarity for the crypto industry as it relates to crypto securities.

SEC Releases Much-Anticipated ‘Reg Crypto’ Framework

In a press release, the Commission announced its proposed rules, “Regulation Crypto Assets”, which would create a framework for certain crypto investment contracts. “This proposal follows the Commission’s March 2026 interpretation clarifying how the federal securities laws apply to certain crypto assets and transactions involving crypto assets,” the release read.

It also follows the SEC’s cancellation of the crypto meeting, which it scheduled for last week to discuss the proposed rules. The Commission is now forging ahead with this move, which would further provide regulatory clarity for the industry even as the CLARITY Act stalls in the Senate.

Notably, the Reg Crypto framework proposes two exemptions from the registration requirements under the Securities Act of 1933 for certain crypto investment contracts. The first exemption would permit offerings of up to $5 million during a four-year period.

Meanwhile, the second exemption would permit offerings of up to $75 million during each 12-month period. “Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. In addition, issuers under the second exemption would be required to provide financial statements and be subject to ongoing reporting requirements,” the SEC noted.

A Conditional Safe Harbor In Certain Conditions

The SEC’s Reg Crypto framework also includes a conditional safe harbor from the term “investment contract” in the definitions of “security” in the Securities Act of 1933 and the Securities Exchange Act of 1934. Under such conditions, the Commission may not consider a crypto asset subject to an investment contract as it relates to what a security is.

Furthermore, the Commission noted that this would preempt state securities law registration and qualification requirements for offers and sales of securities exempted under the framework, as well as certain secondary market transactions.

The public comment period for the proposed rules will be 60 days, during which stakeholders can provide comments on the framework. Meanwhile, it is worth noting that the SEC is also likely to release its ‘Innovation Exemption’ rules for tokenized stocks. The Commission had reportedly put the release on hold for now to avoid any clash with the provisions in the CLARITY Act.

Check out the Top Crypto Prediction Markets for data on the CLARITY Act’s potential passage