On August 21, 2026, the SEC published proposed rules known as Regulation Crypto Assets. The proposal would create a tailored securities offering framework for certain investment contracts involving crypto assets while retaining disclosure requirements, anti-fraud protections, anti-manipulation provisions, and SEC oversight. The public comment period closes October 20, 2026.
The proposal would operate through exemptions and a conditional safe harbor within the federal securities laws. It remains a proposal, and its requirements would take effect only if the SEC adopts final rules.
Startup Exemption: Up to $5M
The proposed startup exemption would permit a project (herein referred to as an “issuer”) to raise up to $5 million during a period of up to four years without Securities Act registration, subject to specified conditions. The exemption would be one-time and non-exclusive. Under the proposed startup exemption, issuers would remain subject to several conditions and investor protection measures, including:
- Public filing of Form NOR at the beginning of the exemption period and Form TR at the end of the exemption period.
- Principles-based narrative disclosures made available to investors during the period.
- Continued application of federal anti-fraud and anti-manipulation provisions.
- Certifications regarding the issuer’s expected completion of essential managerial efforts within four years.
- Reporting regarding satisfaction of the proposed safe harbor conditions and the project’s status at the end of the exemption period.
The SEC describes the exemption as temporary relief while an issuer works toward completing the essential managerial efforts represented or promised to investors. Form NOR and Form TR would serve as the primary filing mechanisms for entering and exiting the exemption.
Forvis Mazars Insight: Issuers considering the startup exemption should assess whether their development timelines, governance processes, and disclosure practices can support the certifications required at the outset and the reporting obligations that follow. Early alignment across these areas may help issuers identify gaps and prepare for compliance throughout the exemption period.
Fundraising Exemption: Up to $75M
The proposed fundraising exemption would follow a two-tier structure modeled in part on Regulation A. Key aspects of the exemption include:
- Tier 1 offerings of up to $20 million during a 12-month period.
- Tier 2 offerings of up to $75 million during a 12-month period.
- Public filing of offering materials that include narrative disclosures, a discussion of financial condition, and financial statements.
- Audited financial statements for Tier 2 offerings.
- Ongoing reporting requirements tailored to covered investment contracts, including annual, semiannual, and current reporting obligations.
Forvis Mazars Insight: Before pursuing a larger raise, issuers may want to consider evaluating whether their financial reporting, audit, and disclosure processes can support the proposed requirements. Identifying gaps early and engaging with advisors and auditors early on in the process can help organizations make informed decisions about offering structure, timelines, and compliance resources.
The Investment Contract Safe Harbor
The proposal includes a conditional safe harbor from the term “investment contract” in the Securities Act and Exchange Act definitions of “security.” When its conditions are satisfied, the covered investment contract would be deemed to have ceased to exist, and the related crypto asset would be deemed outside that investment contract for those statutory definitions.
- The issuer has completed or permanently ceased all essential managerial efforts it represented or promised.
- The issuer is making no new representations or promises and does not intend to undertake new essential managerial efforts for the crypto asset.
- The issuer publicly files a certification and supporting analysis.
The proposed safe harbor focuses on the continuing relationship between the issuer’s promised managerial efforts and the crypto asset. Reliance would depend on the facts and the issuer’s satisfaction of each condition. To rely on the safe harbor, the issuer would file Form TR identifying the covered investment contract and related crypto asset, certify compliance with the Rule 400 conditions, and provide supporting analysis.
Forvis Mazars Insight: The proposed safe harbor focuses on whether “an issuer has completed or permanently ceased the managerial efforts it represented or promised to undertake.” To rely on the safe harbor, the issuer would file Form TR identifying the covered investment contract and related crypto asset, certifying satisfaction of the Rule 400(a) conditions, and providing supporting analysis.
State Law Preemption
The proposal would designate purchasers of covered investment contracts issued under Regulation Crypto Assets as “qualified purchasers” for purposes of the Securities Act. This designation would allow those offerings to qualify as federally covered securities, which would preempt state securities law registration and qualification requirements. As a result, issuers could raise capital under a single federal framework instead of navigating separate registration regimes across multiple states. The proposal would also extend this preemption to certain secondary market transactions involving covered investment contracts, provided the issuer continues to satisfy applicable filing, disclosure, and reporting requirements.
Forvis Mazars Insight: Before an offering, issuers should assess their ability to meet ongoing filing, disclosure, and reporting obligations. Early planning can help organizations address compliance gaps and determine how the compliance framework fits within their long-term capital strategy.
How Forvis Mazars Can Help
Comments on the proposal are due on or before October 20, 2026. Forvis Mazars can help crypto asset issuers organize books and records, prepare financial statements, evaluate internal controls, and develop processes for SEC reporting and regulatory disclosures. Our blockchain and digital assets professionals can also support audit readiness, accounting analysis, tax planning and compliance, and coordination across finance, technology, and risk teams.
For more information, connect with a professional at Forvis Mazars today.