SEC: Comment Period for Regulation Crypto Assets Proposal Ends Today but Will Continue to Accept Feedback
The U.S. Securities and Exchange Commission (SEC) spokesperson stated that the public comment period for the Regulation Crypto Assets proposal ends today, but the commission will continue to accept public comments after the deadline.
The spokesperson said, "We encourage commenters to submit feedback before the deadline, but the commission will continue to accept public comments on the rule proposal after the comment period ends"; the proposal aims to create new financing exemption pathways for U.S. crypto asset issuers.
The proposal includes two exemptions: a startup exemption allowing up to $5 million to be raised within four years (per issuer and affiliates once), and a financing exemption allowing up to $75 million to be raised within 12 months (including a lower tier of $20 million).
The proposal also includes a conditional safe harbor for crypto assets related to investment contracts, which can no longer be considered securities once the issuer completes or permanently terminates its core management efforts and submits a transition report; issuers still need to provide principal disclosures and comply with anti-fraud regulations.
The comment period began on August 21 when published in the Federal Register and lasts for 60 days; over 100 comments have been received so far, including from crypto companies, Wall Street firms, and advocacy organizations, with some comments addressing airdrop treatment, the applicability of the Howey test, and whether existing rules are sufficient.
Five securities law professors submitted comments under the name "Shadow SEC," suggesting that the proposal be withdrawn and re-proposed, arguing that existing Reg D and Reg A data show no need for a new framework, and criticizing the proposal for insufficient exemptions for bad actors.
From a market mechanism perspective, extending the comment period signals regulatory process, and funds and projects may wait or adjust their issuance structure before the final rules are determined; beneficiaries are U.S. crypto issuers seeking compliant financing pathways, while those under pressure are projects relying on existing exemptions or facing higher disclosure requirements.
Source: Public Information
ABAB AI Insight
Historically, the SEC has classified most token issuances as securities through the Howey test and has often used enforcement actions instead of rulemaking; Regulation Crypto Assets was formally proposed in August 2026, attempting to provide tailored exemptions and safe harbors for crypto assets involved in investment contracts, continuing its shift from case-by-case enforcement to a rule framework.
The capital pathway aims to reduce registration costs through startup and financing exemptions while allowing assets to exit investment contracts after management efforts end via the safe harbor; the motivation is to keep more financing activities within the U.S. while retaining anti-fraud and disclosure requirements, making compliance costs a barrier to entry rather than a complete prohibition.
This is similar to the historical exemptions designed under Reg A and Reg D for small and private financing, or the adjustments to securities issuance rules in the early internet; currently, it is in the proposal comment and potential revision stage, with the congressional CLARITY Act yet to pass, making administrative rules the main progress.
Essentially, this represents a regulatory change and a shift in pricing power: by using exemptions and safe harbors, some token issuances move from full registration to conditional compliance, with the mechanism aimed at reducing initial friction to attract capital while maintaining investor protection through disclosures and follow-up reports, allowing issuers that meet U.S. affiliate tests and disclosure requirements to gain financing advantages, while those that do not still face existing constraints.
ABAB News · Cognitive Law
Comment period ending does not mean the window for opinions is closed.
Exemptions lower thresholds, disclosures maintain boundaries.
Rules precede legislation, administrative frameworks determine early pathways.