With Congress unable to advance major crypto legislation, the SEC is moving forward with its own proposed rules.
The U.S. Securities and Exchange Commission (SEC) has proposed a new regulatory framework for certain investment contracts involving crypto assets, signaling that the agency is prepared to provide greater clarity to the industry even as Congress continues to debate broader legislation.
According to the SEC, the proposed new regulation crypto assets would create a “clear and fit-for-purpose framework for certain investment contracts involving crypto assets.”
The agency described the proposal as a “tailored securities offering regime” designed to give eligible entities more opportunities to raise capital while maintaining investor protections.
Under the proposal, certain crypto companies could receive exemptions allowing them to issue up to $5 million worth of tokens over a four-year period or as much as $75 million within a 12-month period.
The proposal would also establish a safe harbor for certain cryptocurrencies from being treated as “investment contracts.”
However, the new framework would not remove regulatory responsibilities entirely. Token issuers would be required to provide financial statements and remain subject to ongoing reporting requirements.
The public will also have 60 days to submit comments after the proposal is published in the Federal Register.
SEC Proposal Follows CLARITY Act Setback
The SEC’s move comes shortly after the U.S. Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act, a bill intended to provide clearer rules for how federal agencies would oversee the cryptocurrency industry.
The legislation has been viewed as an important step toward establishing a more predictable regulatory environment for digital assets. Its failure to move forward has increased uncertainty over whether Congress can deliver comprehensive crypto market structure legislation.
SEC Chair Paul Atkins stressed that congressional action remains important despite the agency’s new proposal. “The SEC has and will continue to support Congress in delivering the CLARITY Act to President Trump’s desk,” Atkins said.
He also warned that legislation is needed to establish durable rules that can withstand future changes in regulatory leadership.
The SEC proposal also did not contain an expected “innovation exemption” for crypto-based stocks, another measure that had been anticipated by some industry observers.
Limited Time Remains for Congress to Act
The CLARITY Act still has a potential path forward, but lawmakers face a tight legislative schedule.
Before leaving Washington for the August recess, Senate Majority Leader John Thune filed cloture on a motion to take up the bill when senators return in September.
The challenge is time. After the recess, senators will have only 14 days in session before breaking again ahead of the November election. They will have another 22 days in session before the end of 2026, when a new Congress will eventually be sworn in.
The situation puts pressure on lawmakers to act quickly if they want the CLARITY Act to become law before the current congressional session ends.
Meanwhile, the SEC is not the only federal regulator preparing to address digital assets.
The Commodity Futures Trading Commission (CFTC) has also scheduled a meeting on crypto, artificial intelligence and prediction markets, with plans to explore areas where regulatory action could complement future congressional legislation.
Together, these developments suggest that U.S. crypto regulation may continue moving forward through agency action while Congress works to determine whether it can deliver a broader legislative framework.
