1. One Step From the Rulebook
The Securities and Exchange Commission is on the verge of publishing its most comprehensive regulatory framework for the crypto industry since the agency began engaging seriously with digital assets. Speaking on April 6 at the inaugural Digital Assets and Emerging Technology Policy Summit hosted by Vanderbilt University and the Blockchain Association in Nashville, SEC Chair Paul Atkins confirmed that a proposed rulemaking internally referred to as "Reg Crypto" — or more formally, "Regulation Crypto Assets" — has cleared the SEC's internal process and is now sitting at the White House Office of Information and Regulatory Affairs for review before publication.
OIRA review is the final administrative step before a proposed rule can be released for public comment. Atkins framed the current moment as the culmination of several months of work since he took the helm of the commission, and made clear that he expects the review to conclude and the proposal to be published shortly. For a crypto industry that has spent years operating in regulatory ambiguity, the imminent arrival of a structured, formal rulemaking represents a transition from an enforcement-dominated environment to one in which the rules of the road for digital asset capital formation are explicitly written down.
2. The Framework's Architecture: Most Tokens Are Not Securities
The intellectual foundation of Reg Crypto was laid in a speech Atkins delivered at the DC Blockchain Summit on March 17, 2026, in remarks titled "Regulation Crypto Assets: A Token Safe Harbor." That speech outlined the interpretive approach the SEC's new framework will apply to digital assets under existing federal securities laws, and it represents a significant departure from the Howey-test-maximalism of the Gensler era.
Under the proposed framework, the vast majority of crypto assets — including digital commodities, utility tokens, collectibles, tools, and payment stablecoins — would be classified as non-securities and would fall outside the SEC's primary regulatory jurisdiction. Only tokenized representations of traditional securities, and crypto assets sold in investment contracts where the Howey test clearly applies, would remain fully subject to existing securities law. The practical implication is that a large portion of the crypto market that has been operating under the perpetual threat of SEC enforcement action for potential securities violations would receive formal regulatory clarity that they are not operating in the securities space.
3. Three Safe Harbor Tiers for Capital Formation
For the narrower category of crypto assets that do constitute investment contracts under Howey — where a project is raising money from investors on the promise of returns generated by the efforts of others — Reg Crypto creates three targeted safe harbor exemptions rather than requiring full securities registration.
The first is a startup exemption, which would give early-stage crypto projects a time-limited, non-exclusive registration exemption lasting up to four years. Within this window, startups could raise up to approximately $5 million without triggering the full registration requirements of the Securities Act of 1933. The exemption is designed explicitly not to disadvantage incumbents — Atkins indicated that the intent is for the startup exemption to be available to newer entrants rather than creating regulatory arbitrage that benefits established players.
The second tier is a broader fundraising exemption allowing raises of up to approximately $75 million within a twelve-month period, subject to simplified disclosure requirements covering financial condition and basic reporting rather than the full S-1 registration process. The third tier addresses innovation more broadly, through a separate exemption framework Atkins described as a long-awaited "innovation exemption" that the SEC intends to publish concurrently with Reg Crypto. This exemption functions more as a sandbox than a formal safe harbor: it is not a rule as such but a framework for structured experimentation that allows projects to test their products within defined parameters while the SEC monitors how the framework is functioning in practice.
4. The Shift From Enforcement to Rulemaking
The significance of Reg Crypto extends beyond its specific provisions. It represents a formal institutional commitment to the principle, articulated by Atkins at multiple points in his chairmanship, that crypto policy will no longer be made through enforcement actions against individual companies but through the transparent rulemaking process that Congress established for administrative agencies.
Gary Gensler's tenure at the SEC produced over a hundred enforcement actions against crypto firms, a strategy that created significant legal costs for individual companies and generated notable settlements but produced no usable regulatory framework for the broader industry. The enforcement approach created what legal practitioners described as a "regulation by ambiguity" environment: companies trying to comply with the law could not reliably determine what compliance required because the rules existed only implicitly through enforcement precedents rather than explicitly through published guidance. Projects that wanted to raise money in the United States effectively had three options: use narrow existing exemptions with significant constraints, register fully as securities offerings with costs and timelines that most crypto projects could not accommodate, or operate in legal ambiguity and hope to avoid enforcement attention.
Atkins explicitly referenced the legacy of his predecessor at the Nashville event, characterizing Gensler's approach as having damaged not just the SEC but also the CFTC — where Gensler previously served as chair — leaving both agencies in need of repair. He noted that SEC staff, whom he had anticipated would resist the new administration's direction, had instead embraced the shift toward clarity-first regulation. That observation suggests the institutional turn toward formal rulemaking reflects not just the chair's personal philosophy but a broader shift within the commission's professional staff.
5. The Securities Act of 1933 as the Statutory Vehicle
Atkins specified that Reg Crypto is grounded in the Securities Act of 1933 — the statute that governs the initial offering of securities, as distinct from the Securities Exchange Act of 1934, which governs secondary market trading. The focus on the 1933 Act is deliberate and significant. It means the initial priority of the rulemaking is capital formation: establishing the conditions under which crypto projects can legally raise money from investors in the United States.
The 1933 Act's exemption framework — currently consisting primarily of Regulation D for private placements, Regulation A+ for mid-size offerings, and Regulation S for offshore offerings — was designed for traditional securities decades before blockchain-based fundraising existed. Applying it to token projects has required tortured interpretations, significant legal uncertainty, and structural constraints on who can invest, how tokens can be transferred, and what secondary market activity is permissible. Reg Crypto's new exemption tiers are intended to create fit-for-purpose alternatives within the 1933 Act's framework rather than requiring token projects to shoehorn themselves into structures designed for conventional equity or debt offerings.
6. The Innovation Exemption: Structured Experimentation
Alongside the formal Reg Crypto rulemaking, Atkins announced that the SEC will also be publishing a separate innovation exemption that the agency has been preparing for some time. He was explicit that this is not a formal rule but a framework for structured experimentation, noting: "We want people really to experiment within that framework." The exemption is designed to allow projects to build and test products under defined conditions while the SEC observes how those products function in practice, gathering the empirical foundation needed to calibrate permanent rules.
One principle Atkins articulated clearly is that the innovation exemption is intended to be neutral across firm sizes — it should not benefit only startups to the disadvantage of established incumbents, nor should it create a two-tier system where newer entrants get regulatory flexibility that existing market participants cannot access. That design principle reflects an awareness that innovation exemptions, if structured narrowly, can effectively become barriers to entry by locking incumbent firms into older compliance frameworks that new entrants can circumvent.
7. The CFTC-SEC Coordination Framework
The Reg Crypto proposal does not emerge in isolation. Last month, the SEC and the Commodity Futures Trading Commission signed a Memorandum of Understanding designed to align their regulatory approaches, reduce overlapping jurisdiction, and share information across the two agencies. Atkins referenced this coordination at the Nashville event, characterizing it as a mechanism for cutting duplicative regulation and providing clearer market guidance on which assets fall under which agency's authority.
The MoU matters in practical terms because the SEC-CFTC jurisdictional boundary has been one of the most persistent sources of regulatory uncertainty for the crypto industry. Digital assets that are not clearly securities typically fall under the CFTC's jurisdiction as commodities — but the boundary between security and commodity for novel digital assets was not clearly established, and the two agencies had historically not coordinated closely on cases that implicated both domains. A formal coordination framework reduces the risk of conflicting guidance and creates a more coherent regulatory pathway for assets that have characteristics of both categories.
8. The Political Dimension: Midterms and Congressional Support
Atkins' remarks at the Nashville event contained an unusually direct political message. At multiple points, he emphasized the importance of the 2026 midterm elections to the sustainability of the regulatory progress he is pursuing, urging the crypto industry audience to engage in those elections and support candidates who back pro-innovation regulatory policy.
He pointed specifically to Senator Bernie Moreno as an example of the kind of Congressional representation the industry should work to maintain and expand, and offered a candid assessment of the risk that an unfavorable midterm outcome could create: congressional allies could be replaced by skeptics who would use legislative and oversight tools to complicate or reverse the regulatory clarity the current administration is building. He framed the stakes in terms that were unusually direct for a regulatory official: "We've got to make sure that your friends are in Congress."
The message reflects a genuine strategic concern. The rulemaking Atkins is pursuing draws on the SEC's existing exemptive and interpretive authority under current law, which means it does not require new legislation to proceed. But it also means that a future chair with different priorities could reverse or substantially modify the framework without legislative action. Atkins' comments suggest he is acutely aware that the durability of Reg Crypto depends not just on its technical quality as a regulatory framework but on the political environment in which it takes root.
9. What Comes After Publication
Once OIRA review is complete and Reg Crypto is published in the Federal Register, the formal rulemaking process begins in earnest. Publication initiates a public comment period during which any party — industry participants, academics, consumer advocates, state regulators, or members of the public — can submit written feedback on the proposed rules. The SEC is obligated to review and respond to substantive comments before finalizing any rule, a process that typically takes months and sometimes extends to a year or more for complex rulemakings.
Atkins acknowledged this timeline explicitly, noting that the agency wants and expects substantive engagement: "We'd love to have reactions and everything else." The comment period will be the industry's most direct opportunity to shape the final form of the framework — to push for broader safe harbor thresholds, more flexible disclosure requirements, or additional clarity on the boundaries of the non-securities classification. The quality and specificity of the comment letters submitted will directly influence how the final rule differs from the proposed version.
After the comment period closes, the SEC must publish a final rule in the Federal Register with a response to the substantive comments it received. The final rule becomes effective after a defined period, at which point market participants can rely on it with the same force as any other regulatory provision.
10. What It Means for the Industry
Reg Crypto's publication would represent the most significant positive shift in the U.S. regulatory environment for crypto capital formation since the industry's modern era began. For founders and projects that have been reluctant to launch in the United States due to regulatory uncertainty, clearly defined exemption tiers with explicit disclosure requirements create a compliance pathway that is both achievable and predictable. For investors — including the retail participants who have historically been excluded from early-stage token sales by the accredited investor requirement — the startup and fundraising exemptions could reopen access to a category of investment that has been effectively off-limits domestically.
The broader signal to the market is one of institutional normalization: the U.S. government is no longer treating crypto capital formation as a compliance minefield to be navigated by enforcement threat, but as a legitimate category of economic activity that deserves a fit-for-purpose regulatory framework. That signal, regardless of the specific provisions of any final rule, changes the risk calculus for the next generation of crypto founders, institutional investors, and traditional financial players who have been watching from the sidelines, waiting for regulatory clarity before committing fully to the sector.