The U.S. Securities and Exchange Commission is signaling a potentially important shift in how smaller companies and crypto-related issuers may access public capital. At a meeting of the SEC’s Small Business Capital Formation Advisory Committee in Washington, D.C., SEC Chair Paul S. Atkins called for a fresh review of Regulation A, arguing that the current framework has not developed into a practical fundraising path for a broad range of issuers, including some offering crypto asset securities.
His remarks matter because Regulation A has long been viewed as a possible middle ground between full securities registration and more limited private fundraising exemptions. For crypto ventures seeking compliant fundraising channels in the U.S., any effort to modernize the rule could reshape how blockchain-based projects approach capital formation.
Atkins says the current framework is falling short
Speaking on the sixth anniversary of the advisory committee’s founding, Atkins used the occasion to highlight what he described as persistent barriers to small business capital formation. He said that despite prior reforms, Regulation A still does not function as a viable framework for widespread use. In his view, the rule has failed to offer an efficient path for issuers that need to raise money without taking on disproportionately high compliance costs.
Atkins was especially direct in linking that problem to the crypto market. He said Regulation A has not been a workable regulatory structure for all issuers, including certain firms offering crypto asset securities. That framing is notable because it suggests the SEC’s leadership is willing to discuss digital asset fundraising not only as an enforcement issue, but also as a capital markets design issue.
For the crypto industry, that is a meaningful distinction. Many token-related or blockchain-based issuers have struggled to find a reliable route into regulated fundraising channels, especially when legal classification, disclosure expectations, and state-level requirements add complexity. Atkins’ comments indicate the SEC is at least considering whether the existing rules themselves are part of the problem.
Past changes did not produce a breakout in adoption
Atkins pointed to data trends that reinforce his argument for reform. He noted that the total amount of capital raised through Regulation A has exceeded the combined fundraising achieved under Regulation Crowdfunding and Rule 504. Even so, Regulation A remains far smaller than the capital raised under Rule 506(b) and Rule 506(c), two exemptions that continue to dominate exempt offerings.
The SEC had already tried to make Regulation A more attractive. In 2021, the agency increased the offering cap from $50 million to $75 million. But according to Atkins, that higher ceiling did not generate a meaningful surge in new activity. Instead, the number of Regulation A offerings has actually declined over the past two years.
That outcome suggests the issue may not be the size limit alone. If issuers are still avoiding the framework despite a higher fundraising cap, then friction may be coming from other sources: legal costs, disclosure burdens, restrictions on offering mechanics, uncertainty about resale liquidity, or uneven treatment across states. In other words, Regulation A may look promising on paper while remaining difficult to use in practice.
Possible reforms could focus on offering flexibility and liquidity
Rather than announcing a finalized proposal, Atkins laid out a series of questions for the advisory committee to explore. Those questions reveal where reform discussions may be headed.
One issue is whether issuers should be allowed to conduct at-the-market offerings under Regulation A. That method is currently prohibited. Atkins asked whether permitting such offerings could improve access to capital without weakening investor protections. For early-stage companies and potentially some crypto-related issuers, more flexible issuance methods could make Regulation A a more realistic funding tool.
Another issue concerns secondary market liquidity. Atkins asked whether state regulation should be preempted for secondary resales under Tier 2. That question is important because liquidity often determines whether an offering structure is useful in practice. If investors face friction or legal uncertainty when reselling securities, the attractiveness of the initial offering may be reduced. Better resale conditions could help make Regulation A offerings more functional for both issuers and investors.
These are not technical details alone. They go to the heart of whether Regulation A can become a meaningful on-ramp to regulated fundraising. In crypto markets, where project financing often depends on market access, tradability, and compliance clarity, those design choices could have outsized effects.
Geographic concentration raises another red flag
Atkins also called attention to the uneven geographic footprint of Regulation A. He said usage of the exemption is concentrated in six states, while most other states have seen two or fewer offerings. That pattern suggests adoption problems are not evenly distributed and may be tied to regional legal, administrative, or market conditions.
The concentration raises a broader policy question: if a federal exemption is meant to support broad capital formation, why is real-world use clustered so narrowly? The answer may involve more than federal rule text. State-level infrastructure, local securities practice, investor networks, and regulatory coordination may all influence whether issuers view Regulation A as usable.
For crypto firms, this unevenness matters. Many digital asset businesses operate across jurisdictions, and fragmented implementation can be a major obstacle. If future reforms reduce geographic inconsistency or improve the treatment of secondary trading, Regulation A could become a more credible pathway for companies that currently see public fundraising options as too uncertain or too expensive.
A notable shift in tone for crypto-related issuers
Perhaps the most significant part of Atkins’ remarks was not any single policy question, but the broader tone. By explicitly including crypto asset issuers in his critique of the current framework, he signaled a willingness to treat digital asset innovation as part of the SEC’s capital formation mission. That does not mean immediate deregulation, nor does it guarantee that crypto projects will receive easier treatment. But it does suggest that the conversation is moving beyond simple restriction and toward institutional design.
That shift is important because crypto businesses have often argued that existing securities frameworks are difficult to navigate when applied to token-based or blockchain-centered models. Atkins’ comments effectively acknowledge that at least some of those concerns deserve review. If the SEC follows through with targeted or broad amendments, the result could be a lower-friction route for compliant fundraising without abandoning investor protection goals.
For now, the SEC has not released a detailed reform package. But the message from the chair is clear: Regulation A is under renewed scrutiny, and the agency is actively reconsidering whether the rule is fit for modern capital formation. If that process results in practical updates, crypto ventures and small businesses alike could gain a more usable path into regulated fundraising markets.
In that sense, Atkins’ remarks may mark the beginning of a larger debate about how U.S. securities law should adapt to new technologies while still preserving core safeguards. For the crypto sector, the immediate takeaway is not that the rules have changed, but that the possibility of a more workable fundraising framework is now being openly discussed at the top of the SEC.