SEC proposes crypto rules with $75M cap, ending XRP-era uncertainty

The US Securities and Exchange Commission proposed Regulation Crypto Assets on Tuesday, creating two exemptions for token sales to US investors and a formal mechanism for crypto assets to exit securities classification. The first exemption permits one-time offerings up to $5 million over four years; the second allows up to $75 million per 12-month period, with both routes requiring narrative disclosures to investors.

"In line with the Commission's earlier interpretative guidance, this proposal would also allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract," SEC Chairman Paul S. Atkins said in the release. "Congress designed our securities laws to amplify — within specific guardrails — opportunities for entrepreneurs to innovate and build new products."

Issuers using the larger exemption must publish financial statements and file ongoing reports. Federal rules would preempt state securities registration requirements for these offerings and certain secondary trades. The package builds on the joint token taxonomy the SEC and Commodity Futures Trading Commission issued on March 17, which explained how a non-security crypto asset can enter and leave an investment contract.

The proposal answers the question at the center of the SEC's 2020 lawsuit against Ripple over XRP. Judge Analisa Torres ruled in 2023 that XRP itself was not a security, though certain institutional sales crossed the line. The case closed in August 2025, but no rule told issuers how to exit securities status without a judge. The proposed safe harbor supplies that mechanism.

The XRP question gets a written answer

The safe harbor takes effect once a team completes or permanently ends the managerial work it promised buyers under an investment contract — the "essential managerial efforts" test that courts have applied since the SEC's landmark Howey decision.

XRP trades near $1, little changed over the past day, with a $62.7 billion market cap that ranks sixth overall. The token still sits well below its July 2025 record of $3.65. Ripple faces a separate overhang: the company will unlock 1 billion XRP from escrow on September 1, though it plans to re-lock 600 to 800 million, injecting only 200 to 400 million into the market.

The proposal's structure loosely recalls the initial coin offering era, when projects raised billions from the public before enforcement closed that channel. This time, dollar caps and disclosure duties frame the activity from day one.

Industry reaction and the legislative path

The proposal arrives as congressional action on digital asset market structure stalls. The Digital Asset Market Clarity Act awaits a Senate vote, with Majority Leader John Thune filing a cloture motion setting up a September 15 procedural vote requiring 60 votes. The Senate calendar offers only 14 working days after lawmakers return before an October election recess.

"The agencies seemingly are ready to act, given that Congress has been unwilling or unable to do so," Miller Whitehouse-Levine, CEO of the Solana Policy Institute, said.

Industry executives warn that agency-level rules offer a fragile substitute for legislation. "But then the next administration, depending on how that shakes out, we can be looking very much like a potentially Gensler 2.0 type scenario," Josh Riezman, chief legal and strategy officer at GSR, said, referring to former SEC Chair Gary Gensler.

The public comment period remains open for 60 days after Federal Register publication. The safe harbor's final conditions will determine whether issuers that built offshore actually bring token sales back to the US.

This article is for informational purposes only and does not constitute investment advice.