The U.S. Securities and Exchange Commission’s public comment period for its proposed Regulation Crypto Assets ended on Oct. 20. The rulemaking, first introduced on Aug. 18, 2026, is meant to move crypto token fundraising away from a system shaped mainly by enforcement actions and toward a dedicated framework for public capital raising.
The proposal contains four core changes. It would create a registration exemption for startup projects, allowing them to raise up to $5 million over four years without an audit or a licensed intermediary. It would also establish two fundraising exemptions for more mature projects, with annual caps of $20 million and $75 million, each tied to different levels of disclosure, financial reporting, and audit requirements. A separate safe harbor would let issuers file Form TR after completing, or permanently ending, promised development work so that the token would no longer be treated as a security because of the original investment contract. The proposal also would preempt state-level securities registration requirements in certain cases, reducing compliance friction for interstate issuance and trading.
Most coded comments backed the direction, not the text as written
According to public tracking data compiled by Mert Erinc, a researcher at BI Norwegian Business School in Norway, the SEC had received 171 comments by Oct. 20, and 165 of them had been coded. The tracker used three independent AI reviewers to classify the submissions.
By overall stance, 8 comments were clearly supportive, or 5%. Another 115, or 70%, were conditionally supportive. Fourteen, or 8%, were clearly opposed. Three, or 2%, were mixed. The remaining 25, or 15%, were procedural or off-topic.
That 70% figure does not mean 70% of commenters wanted the proposal adopted unchanged. The dominant group accepted the direction of reform but asked the SEC to revise specific provisions.
Supporters endorsed the framework while pressing for changes
Among the commenters that supported or broadly supported the proposal, Nasdaq said the safe harbor was a 「carefully designed mechanism」 and argued that the tiered disclosure structure was appropriate. A letter under SkyBridge Capital called the proposal 「thoughtful, measured, and long overdue」. The Hyperliquid Policy Center urged the SEC to move quickly, but asked the agency to make clear that filing Form TR would not amount to an admission that the token had previously been a security. Ava Labs described the proposal as an 「important first step」 while also arguing that the definition of 「crypto asset」 was too broad.
Critics said the draft could weaken long-standing securities protections
Opposition came from several directions. Five securities law scholars — Coates, Coffee, Cox, Fox, and Seligman — said in a joint submission that the proposal had fundamental flaws. In their view, the startup exemption departs from nearly a century of securities law tradition, and any fundraising exemption could be handled by revising Regulation A instead.
John Reed Stark and Duke University’s Lee Reiners called for the proposal to be withdrawn in full. Public Citizen said the safe harbor would create a 「regulatory loophole」 and argued that replacing state law in this area would shield bad actors. The Independent Community Bankers of America, or ICBA, said the rule should not be finalized unless the SEC can show that the proposed accommodations are grounded in risk assessment, and it asked for an automatic sunset provision. Davis Polk took a middle position, saying there was 「a better way」 to proceed without starting over from scratch.
Four issues drew the heaviest debate
Looking at the direction of requested changes, 44 comments, or 27%, asked for looser rules. Forty-nine, or 30%, asked for tighter rules. Another 23, or 14%, asked for both loosening and tightening in different areas. The rest mainly sought clarification, supported the draft as written, or did not fit that classification.
Commenters in favor of reform argued that existing securities rules do not fit every token issuance model. They said the proposal could lower fundraising costs for startups, open a lawful path for retail participation, and clarify when a token can leave securities regulation behind.
Opponents were split. One camp said the proposal still regulates too much by pulling decentralized projects into a traditional securities framework. The other said the exemptions are too permissive and could weaken investor protection or create room for fraud and insider dumping.
Fundraising limits
On fundraising caps, commenters seeking looser treatment wanted the $5 million startup ceiling raised and asked the SEC to exclude non-fundraising token distributions such as airdrops and staking rewards. Those seeking tighter rules said the exemption could already be too large.
Disclosure
Disclosure produced the strongest push for tighter standards. Commenters asking for flexibility focused on lowering compliance costs. Those asking for stricter treatment wanted disclosures filed through the SEC’s EDGAR system and called for stronger audit and ongoing reporting requirements. In this area, 83 comments asked for tighter rules, while only 8 asked for looser ones. The main requests were that startup disclosures should also go through EDGAR and that Tier 1 financial statements should be audited.
On related points, 19 comments asked for looser treatment on state-law priority issues, and 15 asked for looser treatment on issuer eligibility. One key question was whether a DAO without a legal entity could use the framework.
Insider sales
The proposal does not impose a mandatory lock-up period. On insider resales, audit groups including the Center for Audit Quality asked for additional safeguards. Twenty comments sought tighter limits, including holding periods or lock-up requirements.
Safe harbor
The safe harbor drew the broadest debate. Ninety-seven comments addressed the mechanism for exiting securities status. Of those, 36 asked for looser conditions and 28 asked for tighter ones. Commenters seeking more flexibility wanted broader exit criteria and stronger recognition of network functionality and decentralization. Those seeking tighter rules asked for independent verification so that a project could not leave securities oversight permanently based only on its own statements. Bitwise said exit should be judged by externally observable facts, while Public Citizen and others argued that the threshold was too low.
Final adoption may be likely, but revisions still look necessary
In the source article, author Meng Yan said the proposal has a relatively high chance of being adopted, though not without changes, and estimated that the final rule could still be months away. His view was that the policy basis for reform is already in place and that most substantive comments focused on how to revise the framework rather than whether to reject it outright.
Even so, the SEC still has to address investor protection, legal authority, and possible judicial challenges. That leaves the final timetable uncertain.
If adopted, the rule could open a dedicated path for token fundraising in the U.S.
If the proposal is finalized, the U.S. crypto industry could see three major changes. Public token fundraising would have a dedicated lawful route. Projects would get a clearer process for exiting securities regulation. The boundary between federal and state oversight would also become more uniform.
At a broader level, the proposal is an attempt to build a full regulatory path for crypto projects, from fundraising and development to a mature network. In industry terms, that is close to the idea of bringing back a compliant ICO model.
Regulatory certainty, however, is not the same as investment safety. The eventual effect of the framework will still depend on disclosure standards, limits on insiders, and the conditions for leaving securities status.