At 10 a.m. Eastern on Friday the Securities and Exchange Commission opened a public meeting to consider something it has never issued before: a purpose-built rulebook for selling crypto tokens. The proposal is called Regulation Crypto. It runs to roughly 400 pages. It exists because Congress has not finished the job.
Three commissioners sit on the panel — Chair Paul Atkins and Commissioners Hester Peirce and Mark Uyeda. All three are Republicans. There was never much suspense about whether a proposal would be published for comment. The interesting question is what is inside it, and the answer is a registration off-ramp with three lanes.
The three doors
- A startup exemption. Early-stage teams can raise roughly $5 million on whitepaper-style disclosure, with up to four years of runway before the full registration regime bites.
- A fundraising exemption. Up to $75 million in any rolling 12-month period, in exchange for audited financials and semiannual reporting.
- An investment-contract safe harbor. The consequential one. A token whose network reaches sufficient decentralisation can exit securities classification altogether, with the exit test built around whether the founding team’s essential managerial efforts have ceased.
Antifraud liability survives all three lanes. Disclosure obligations are pegged to decentralisation milestones rather than a fixed calendar, which is the part that will get argued over hardest — “sufficiently decentralised” has been a phrase in search of a definition since 2018, and writing it into a rule means someone finally has to draw the line.
Our take: Friday is a start gun, not a finish line, and the gap between the two is roughly a year. Publishing a proposal opens a comment period that normally runs 60 to 90 days. Staff then read the submissions, rewrite the text, and the commission votes a second time to adopt, re-propose or shelve it. People tracking the docket do not expect a final rule before mid-2027, and that assumes the agency does not have to re-propose. Anyone reading Friday as “token launches are now legal in America” has skipped three steps and a year of calendar.
Why the agency moved without the legislation
The Digital Asset Market Clarity Act was supposed to settle where the SEC’s jurisdiction ends and the CFTC’s begins. It passed the House 294–134 in July 2025 and cleared Senate Banking 15–9 in May. Its first procedural floor vote is now scheduled for 2:15 p.m. on September 15. Cloture needs 60 votes and Republicans hold 53, with unresolved fights over stablecoin yield and conflict-of-interest language still open.
A rulemaking does not need 60 votes. It needs two out of three commissioners and a comment file. That is the entire logic of the move: the SEC is building the framework it can build alone, on a timetable it controls.
There is a cost to that. A rule adopted 3–0 by one commission can be unwound by a differently composed one, through the same notice-and-comment process, in the same year or two. Statute is durable; regulation is a posture with paperwork. The industry spent five years asking for certainty and is being offered speed instead.
What to watch
- The decentralisation test as drafted. Everything turns on how the release defines cessation of essential managerial efforts. Vague language means the safe harbor is decorative; a bright line means litigation about the line.
- The comment file. Sixty to ninety days from publication. Whether the banking lobby files against the safe harbor tells you how the final draft moves.
- September 15. If cloture on the Clarity Act fails, the SEC framework becomes the only game, and re-proposal risk rises with it.
- Whether issuers actually use it. A $5 million cap with four years of milestone disclosure is a real compliance load for a seed-stage team. Adoption, not approval, is the measure.
Crypto asked for rules instead of enforcement actions. What arrived on Friday is a draft of rules, a comment window, and a second vote no earlier than next year. Those are the terms.