SEC Crypto Rule Draws More Than 100 Responses as Comment Period Closes
Industry groups support a federal framework but dispute exemptions, disclosure duties and investor protections before the proposal can become final.
The US Securities and Exchange Commission’s proposed Regulation Crypto Assets has drawn more than 100 public submissions as its comment period closes, exposing broad support for clearer rules but significant disagreement over how token offerings and trading should be supervised.
The Commission proposed the framework on 18 August. The new event is not the proposal itself but the completed first round of stakeholder responses. The draft would create tailored exemptions for crypto offerings, including a startup route of up to $5 million and a fundraising exemption of up to $75 million over 12 months, subject to conditions and disclosure.
Hyperliquid Policy Center urged the SEC to adopt the regulation while expanding protections for decentralised projects. It asked the agency to clarify the treatment of airdrops and to provide a broader safe harbour for networks that need time to distribute control. The request reflects a recurring problem: requiring full securities compliance before a network is functional can be impractical, but broad exemptions can expose buyers to promoters who never deliver meaningful decentralisation.
The Alternative Investment Management Association focused on information. It argued that investors need clearer disclosure of legal rights, token mechanics and material events. Crypto assets can represent very different claims—access to software, governance power, payment functionality or an interest in cash flows. A common label does not give investors enough information to compare risk.
The Securities Industry and Financial Markets Association commented separately on the SEC’s proposed Innovation Exemption, saying investor protection and issuer participation required changes. Its position highlights another divide. Trading platforms want room to test new market structures, while broker-dealers and asset managers need confidence that experimental venues do not gain lighter obligations for custody, conflicts or market integrity.
Public comments do not decide the rule by vote. SEC staff must assess legal authority, costs, market effects and alternatives before commissioners consider a final text. The agency can revise the proposal, request more comment or abandon it. A final rule would still face possible court challenges, especially if participants believe exemptions or definitions exceed the Commission’s statutory powers.
The scale thresholds matter for capital formation. A $5 million startup exemption could let small teams test a network without the expense of a full registered offering. A $75 million route could finance meaningful development. Both also create incentives to structure transactions around the limits. Disclosure, resale restrictions and anti-fraud enforcement will determine whether the exemptions support useful experimentation or regulatory arbitrage.
The debate also affects decentralised finance. If governance tokens or protocol distributions fall within the framework, developers, foundations, exchanges and liquidity providers need to know who is the issuer and when obligations end. A rule designed around a clearly identifiable company may fit poorly when control changes over time. That difficulty does not remove the need to identify accountable parties when investors are solicited.
Why it matters
The proposal is one of the clearest attempts to replace enforcement-driven crypto policy with a federal issuance framework. Its final shape could determine which projects can raise capital in the United States, what information buyers receive and whether regulated intermediaries can support token markets at scale.
Nothing is final. The SEC has received advocacy from participants with different commercial interests, and more than 100 submissions do not imply consensus. Investors and issuers should rely on existing law until commissioners adopt a final rule and its effective date arrives. The next phase is regulatory analysis, not immediate permission to use the proposed exemptions.
Sources: SEC proposal · SEC rule file · The Block