SEC Regulation Crypto Assets: When a Token Is No Longer a Security

The US securities regulator, the SEC, had its proposed rule Regulation Crypto Assets printed in the Federal Register on August 21, 2026. A hard clock has been running since that day: the agency will accept comments on it until October 20, 2026. The proposal answers the question on which American crypto regulation has been snagged for years, namely when a token stops being the subject of an investment contract. For you as a holder, nothing changes today, because the text is not yet law. What is settled since the printing is the schedule, and that is precisely the news.

What Regulation Crypto Assets is, and why October 20, 2026 counts

Regulation Crypto Assets is a bundle of new rules that the SEC wants to place in a section of US federal law of its own. The proposal has two thrusts: it creates two exemptions from the registration requirement for issuers, and it describes for the first time in written form the conditions under which a crypto token is no longer treated as part of an investment contract.

The Federal Register is the official gazette of the US federal agencies. A proposed rule has no binding force there yet, but the printing sets in motion the period within which any interested person may file objections. This procedure is called notice and comment: the agency lays open a draft, gathers comments, and must address the substantial objections in the final version.

Until August 18, every report said only that the period ran 60 days after printing. Without printing there was no date. Since August 21 there is one, and it stands verbatim in the DATES line of the document: “This release was published in the Federal Register on August 21, 2026. Comments should be received on or before October 20, 2026.”

Why this counts for you, even though you are neither an issuer nor a US resident: the moment at which a rule takes legal effect determines from when trading venues, brokers and custodians adjust their product ranges. What a US venue is allowed to list helps decide which tokens gain broad liquidity at all.

What the Federal Register says: docket number, page number and the running of the period

The references are verifiable, and you should know them, because they let you read every headline about this against the source yourself. The matter is classified as a Proposed Rule, that is, expressly as a proposal.

• Document number 2026-17183, printed on August 21, 2026
• Citation 91 FR 54510, running to 146 pages
• Docket File No. S7-2026-27, Release Nos. 33-11434 and 34-106150
• Rulemaking number RIN 3235-AN38
• Comment deadline October 20, 2026

The agency states in the summary itself what the proposal is meant to achieve: a tailored issuance framework for certain investment contracts connected with crypto assets, which eases capital formation while protecting investors. Anyone who wants to read the full text in the original will find it at the Federal Register. The trade outlet Journal of Accountancy has independently placed the length of the period and the core of the proposal in context.

Who may file a comment

The document names three routes of submission: the comment form on the SEC website, an email with the docket number S7-2026-27 in the subject line, and paper mail to the Secretary of the Commission. A restriction to US citizens is not stated there. The agency expressly points out that all comments submitted appear publicly on its own website and that you should not write in any personal data you do not want to see published.

The Howey test: why a token can become a security in the US at all

To place the safe harbor, you need the term it is built around. An investment contract is, under the case law, any arrangement in which someone puts money into a common enterprise and thereby reasonably expects profits arising from the essential entrepreneurial efforts of others. This formula comes from a 1946 decision of the US Supreme Court and is therefore called the Howey test.

The point on which everything turns is the essential managerial efforts, that is, the essential entrepreneurial efforts of the issuer. As long as a team promises to develop a network further, and buyers base their profit expectation precisely on that, an investment contract exists on this reading. The token itself is never the security, but the subject of the contract. This distinction sounds hair-splitting, yet it carries the entire construction of the new proposal.

You know the practical consequence from the years-long legal dispute between the SEC and Ripple over XRP: without a written rule, every individual case had to be settled in court. The SEC itself describes in the proposal text that it handled crypto cases case by case for years and that the Howey test is hard to apply to crypto assets. It is precisely this uncertainty that the draft aims to reduce.

The investment contract safe harbor: the two conditions in Rule 400

A safe harbor is a rule that makes clear under which precisely described conditions a conduct is treated as lawful. The safe harbor proposed here stands in Rule 400 and is expressly non-exclusive, meaning: anyone who does not meet the conditions does not thereby automatically have a security in front of them.

If both conditions are met, the investment contract is to count as ended, and the token is deemed no longer covered by the securities definitions of the Securities Act of 1933 and the Exchange Act of 1934.

1. Rule 400(a) – the efforts are over. The issuer has completed or permanently ceased all essential entrepreneurial efforts it had promised. In addition, it may make no new promises of this kind, nor intend to make any.
2. Rule 400(b) – there is a filing. The issuer files a transition report on the new form Form TR with the Commission, entered into the electronic filing system EDGAR. EDGAR is the public database in which US issuers deposit their mandatory documents, and it is freely accessible to anyone.

The second point is the more interesting one for you as an investor. Until now you could at best guess whether a project team considers its roadmap complete. Were the proposal to go through like this, a public register of such declarations would emerge, together with the issuer’s reasoning. The proposal text describes Rule 400 as codifying an interpretation the Commission had already published in 2026.

What the safe harbor expressly does not abolish

Even those who rely on the exemptions remain subject, under the proposal, to the rules against fraud and market manipulation. That is how it stands in the summary of the document. A token that meets the safe harbor is therefore not a lawless space, but merely relieved of a particular registration question.

Startup exemption and fundraising exemption: 5 and 75 million dollars

Alongside the safe harbor, the draft contains two exemptions from the registration requirement under Section 5 of the Securities Act. Both target issuers, not holders, yet they shape which projects may raise money legally in the US at all.

The startup exemption permits issuances of up to 5 million dollars within four years. What is remarkable about it is what it does not require: the proposal text notes that it does not forbid sales to retail investors and sets no cap per retail investor, and that general solicitation would be allowed. The reasoning is that network effects would otherwise be hindered.

The fundraising exemption permits up to 75 million dollars per twelve-month period. This regime leans heavily on Regulation A, an existing US regime for smaller public issuances, and is split into two tiers with different caps. Here issuers would have to present financial statements whose depth of audit depends on the size of the issuance, and to report on an ongoing basis afterwards. The draft also provides for investment limits for individuals and the possibility of gathering non-binding indications of interest.

For both exemptions there is a bar for relevantly tainted persons, in the original a bad actor disqualification, taken over from the rulebook of Regulation A. If you are interested in which trading venues in Europe operate under supervision, you will find that in the comparison of regulated crypto exchanges.

What the proposal changes for you as a German holder today, and what it does not

The honest answer is: today, nothing. A proposed rule is a draft. It may look different in the final version, it may be delayed, and it may fail in parts. Anyone who derives a buying opportunity from this document is overstretching it.

The matter is practically relevant nonetheless, and for four reasons.

• Listing decisions. Trading venues align their offering with the tokens they can legally classify. Clearer US rules change, over the medium term, what is tradable globally.
• The state of information. A public register of transition reports would be a data source that does not exist so far, and it could be read before a purchase.
• Project financing. If issuances of up to 75 million dollars become possible within a regulated framework, capital shifts from unregulated routes into documented ones.
• Expectation-forming. Regulatory schedules move expectations, and expectations move prices, including for Bitcoin, even though Bitcoin is not itself addressed by this proposal.

How quickly an announced date becomes a postponed one this matter itself has shown: the vote originally set for August 14, 2026 did not take place as planned. We placed that in context at the time, and the state of that text is now overtaken – you can read it in our article SEC cancels crypto vote.

Why a US rule reaches through to your portfolio even though MiCA applies in Europe

In the European Union, the Markets in Crypto-Assets Regulation, MiCA for short, governs the framework for issuers and service providers. A US rule changes nothing about that directly. Two channels of effect exist nonetheless.

The first is the market. The price of a globally traded token does not arise in one legal order, but where the most volume lies. If a US rule shifts the conditions for issuers and trading venues, it thereby shifts the conditions for everyone who holds the same token.

The second is the supply side of your own provider. Many brokers and exchanges usable in Europe belong to groups with US business. Their product decisions follow the strictest supervision to which they are subject. That is why it is worth looking at the supervision under which your provider operates before you commit to an offering.

How to verify the running of the period yourself instead of believing headlines

With regulatory reports, the most important part often wanders out of the headline. These four steps cost you a few minutes and spare you false conclusions.

1. Watch the classification. If the document says Proposed Rule, it is a draft. Final Rule would be law in force. This statement is right at the top.
2. Read the DATES line. There stand the date of printing and the comment deadline, here October 20, 2026. All other dates in media reports are derivations of it.
3. Take the docket number with you. With File No. S7-2026-27 you will later find the comments submitted and the final version again, without working through search engines.
4. Distinguish issuer duty from holder duty. Almost everything in this proposal is aimed at issuers. For you as a holder, no duty to act arises from it.

Just as verifiable is the counter-check: the draft itself puts open questions up for discussion, for instance whether investment limits for individuals should apply to the startup exemption too. Anyone who claims the terms are settled has not read the text.

What a safe harbor does not deliver: the fraud ban, the tax duty, the venue risk

Even if the proposal became law unchanged, three things would remain untouched, and all three concern you more directly than the registration question.

The fraud ban remains

The proposal makes clear that issuers relying on the exemptions remain subject to the rules against fraud and market manipulation. A token outside the notion of an investment contract is not a vetted product and carries no quality statement.

German taxation remains

How a token is classified under securities law in the US says nothing about how a sale is taxed in Germany. What is decisive here is German income tax law, which makes gains from private disposal transactions tax-free after a holding period of one year. Whether and how that applies to your case, you settle with your tax adviser; cleanly documented transactions are the basis for it, and tax and portfolio tools help with that.

The risk of your trading venue remains

Securities law does not protect you against a provider suspending withdrawals, dropping trading pairs or leaving the market. This risk hangs on the choice of provider, not on the classification of the token.

SEC Regulation Crypto Assets: what to take away

1. Remember the one date, not the headline. The comment period runs until October 20, 2026, after which the evaluation begins, and only after that can a final version come. Anyone who wants to align their portfolio with clearer US rules chooses their trading venue deliberately and compares the terms in the overview of regulated crypto exchanges.
2. Separate issuer duties from your own. Registration, reports and forms concern projects. What hits you is the tax question on every sale, and that requires a complete transaction history – keep track of it with crypto tax and tracking tools.
3. Check your provider’s supervision before you wait for rules. The legal framework under which your broker operates has an effect today; a US draft has one in months at the earliest. Which providers stand under which supervision is shown by the crypto broker comparison.

(As of August 22, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)