Regulation Crypto Assets, Two Months Later: What Has Changed, What Hasn’t, and How a Cross-Border Project Might Use It

When the SEC proposed Regulation Crypto Assets on August 18, 2026, most coverage focused on the headline numbers: $5 million, $20 million, $75 million. Two months later, the more important story is the context around those numbers. Congress’s market-structure bill has stalled, the CFTC has started building the trading-side framework the SEC’s proposal anticipates, and the public comment record shows sharp disagreement about whether the rule goes too far or not far enough.

This post looks past the press release. We cover what has happened since August, how the proposal fits with the other rules a crypto project must navigate, and how it might play out for a hypothetical founding team based outside the United States.

The Proposal, Briefly, and Three Details the Press Release Left Out

The proposal (91 Fed. Reg. 54510, File No. S7-2026-27) would create two registration exemptions for investment contracts involving crypto assets and a conditional safe harbor for determining when those investment contracts end. Three details matter more than the press release suggests:

• The Startup Exemption has no U.S.-nexus test. Under proposed Rule 200(b)(2), the issuer “may be an entity, an individual, or a group of individuals or entities.” The rule’s conditions include no U.S.-organization requirement, no limit on who may invest, and no restriction on general solicitation. The SEC chose not to propose individual investment limits, though it asked commenters whether it should (proposing release). The CRS likewise notes that the exemption would not limit sales to retail investors or impose resale restrictions.
• The Fundraising Exemption works more like Regulation A than a notice filing. Issuers would file a Form 1-CRYPTO that the SEC must qualify before any sales. Tier 2 offerings would require audited financial statements, non-accredited investors would be subject to a 10% investment limit, and ongoing reporting would apply (SEC fact sheet; Congressional Research Service).
• The safe harbor is self-certified but not final. An issuer would file a Form TR certifying that it has completed or permanently ceased the essential managerial efforts it promised, with an analysis supporting that certification. The safe harbor is non-exclusive, and its effect is framed in terms of how the token would be “deemed by the Commission.” The SEC could still challenge the certification (CRS).

What Has Happened Since August

The CLARITY Act stalled in the Senate. On September 15, 2026, the Senate rejected cloture on the motion to proceed to H.R. 3633 by a 49–50 vote, well short of the 60 votes required. This matters for Regulation Crypto Assets because the proposal rests on the SEC’s existing exemptive authority rather than on a statute. In our view, that makes the framework less durable than a statutory exemption would be: a future Commission could amend or withdraw it through the same rulemaking process. The CRS also notes that the House-passed bill and the Senate draft would have gone further than the SEC’s proposal on secondary-market trading.

The CFTC began building the other half of the framework. On October 5, 2026, the CFTC announced an advance notice of proposed rulemaking titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” which was published in the Federal Register on October 13. Comments are due December 14, 2026. The notice expressly describes itself as a complementary federal framework for crypto assets covered by the SEC’s proposed safe harbor, and it contemplates a new “crypto asset market” category of CFTC-designated contract market. In practical terms, the two agencies are building a handoff: a token begins under the SEC while the promoter’s promised work is ongoing, and its trading moves toward a CFTC-supervised market once that work is complete.

The SEC used exemptive relief again, this time for tokenized stocks. On September 17, 2026, the SEC granted a five-year, conditional “Innovation Exemption” allowing certain venues and liquidity providers to trade tokenized NMS stock. The relief is separate from Regulation Crypto Assets, but it confirms that the Commission is willing to move through exemptions without waiting for Congress. It is also a reminder that Regulation Crypto Assets is not a vehicle for tokenized equities. The proposal applies only to “covered investment contracts,” which require that the crypto asset subject to the contract is not itself a security (proposing release).

The comment record is divided. Comments were due October 20, 2026. Some industry commenters support the framework but want more. Hedera’s October 7 letter, for example, asks the SEC to codify the asset categories from its March 2026 interpretation and to define more clearly when ongoing maintenance and upgrades count as “essential managerial efforts.” On the other side, five prominent securities law professors, including a former SEC General Counsel, endorsed a statement calling the proposal “deeply flawed” and urging the SEC to repropose it, in part because the Startup Exemption lacks resale restrictions. The final rule could move in either direction.

The Related Rules a Project Still Has to Reconcile

Regulation Crypto Assets is one piece of a larger set of rules:

• The March 2026 interpretation. The SEC’s March 17 interpretation, which the CFTC joined, sorted crypto assets into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The proposal codifies only part of that interpretation, namely when a crypto asset separates from an investment contract.
• The GENIUS Act. Payment stablecoins have had their own federal framework since the GENIUS Act was signed on July 18, 2025.
• Antifraud law and intermediaries. Both exemptions leave federal antifraud and antimanipulation liability in place (SEC fact sheet), and state preemption would not displace the states’ authority under Securities Act section 18(c) to pursue fraud (proposing release). The proposal also does not resolve whether exchanges, brokers, and dealers must register to trade covered tokens. The CRS warns that this could make intermediaries reluctant to list them.
• Home-country rules. A non-U.S. project remains subject to its home regulator. In the European Union, for instance, an offer of crypto assets to the public generally requires a white paper under MiCA, which is notified to (but not approved by) the competent authority of the offeror’s home Member State. Those requirements have applied since December 30, 2024.

Case Study: A Madrid-Based Project Considers the U.S.

The following scenario is hypothetical and illustrative. It is based on the rule as proposed, which may change.

“Lumen” is a Spanish sociedad limitada founded by three engineers in Madrid. It is building a decentralized network for verifying and settling renewable-energy credits, and the network’s token is used to pay fees on the network. The team plans to raise capital in stages.

Year 1: a $4 million community round. Historically, Lumen’s U.S. options would have been Regulation D (with most offerings in practice limited to accredited investors, and with resale restrictions) combined with offshore sales under Regulation S. The proposed Startup Exemption would change that. Because it has no U.S.-nexus requirement, Lumen could rely on it from Spain, market openly, and sell to U.S. retail purchasers. The trade-offs are significant, however:

• The exemption can be used only once for the same or a substantially similar asset.
• Lumen would file a Form NOR and post principles-based disclosures covering, among other things, its management and conflicts of interest, the token’s economics and allocation, source code, governance, and risk factors (proposed Rule 103(b)).
• A four-year clock would start to run.

If Lumen also sells in the EU, it would prepare a MiCA white paper. Its U.S. and EU disclosures would have to tell the same story, because inconsistencies between them are an antifraud problem in both jurisdictions.

The most consequential document in this round is Lumen’s roadmap. Under the proposal, what Lumen promises defines what it must later certify as complete. The CRS notes that this may encourage issuers to narrow their representations. But a roadmap that promises too little may not attract investors. Lumen’s founders would need to commit to milestones they can realistically deliver within four years.

Year 2: a $30 million growth round. Thirty million dollars exceeds Tier 1’s $20 million limit, so Lumen would look to Tier 2 of the Fundraising Exemption. It would not qualify. The Fundraising Exemption requires the issuer to be organized in the United States, to have a majority of executive officers or directors who are U.S. citizens or residents, to hold more than 50% of its assets in the United States, and to be principally administered there. Forming a Delaware subsidiary would satisfy only the first of those requirements.

Lumen’s real decision is whether to move its center of gravity to the United States, which carries corporate, tax-residency, employment, immigration, and intellectual-property consequences on both sides of the Atlantic. Its alternatives are to raise through existing exemptions or to wait and see whether the final rule changes; the SEC has asked whether the Fundraising Exemption should be extended to Canadian or other foreign issuers. If Lumen does qualify, Tier 2 would bring SEC qualification, audited financial statements, ongoing reporting, investment limits for non-accredited purchasers, and a $22.5 million cap on sales by affiliates.

Year 4: the Form TR. Lumen must file a Form TR no later than four years after its Form NOR. If its promised work is complete, the Form TR would certify that it has completed or permanently ceased its essential managerial efforts, supported by its own analysis. If the work is not complete, the Form TR would instead describe the project’s status and Lumen’s plans, and the startup window would close without the safe harbor. If the safe harbor’s conditions are met, the SEC would treat the token as no longer subject to an investment contract, and trading would increasingly fall under the CFTC framework that is now taking shape. However, the SEC could still challenge the certification, and state fraud authority would remain. For that reason, Lumen should document its milestone completion and governance handoff as the project progresses, not reconstruct them at the end.

Lessons from the scenario:

• Choosing an exemption is a corporate-structure decision. For non-U.S. teams, the Startup and Fundraising Exemptions lead to very different corporate structures.
• The roadmap is a legal document. It defines both what investors are buying and what the project must certify at the end.
• Build for more than one regulator. That means the SEC today, the CFTC later, and a home-country regulator throughout.
• Plan for a rule that may change. A structure that only works if the proposal is adopted unchanged is fragile.

What to Watch Next

There are four developments to watch: whether the SEC adopts the rule, modifies it, or reproposes it in response to the comment record; the CFTC’s December 14 comment deadline and any proposed rule that follows; whether the CLARITY Act is revived; and whether Congress revisits market-structure legislation after the November midterms. Regulation Crypto Assets is not in effect, and companies should not structure transactions on the assumption that it will be adopted as proposed. They should, however, use this window to make the structural decisions that will determine whether they can use it.

Saltiel Law Group advises U.S. and international businesses, investors, and entrepreneurs on corporate structuring, securities matters, capital raising, and cross-border transactions. If you are considering a U.S. capital raise or evaluating how the evolving crypto framework could affect your business, contact Saltiel Law Group to discuss your objectives.