SEC Proposes Crypto Rules as CLARITY Act Stalls in Senate
The US Securities and Exchange Commission has moved to fill a growing regulatory vacuum, publishing a proposed framework for crypto token issuances on August 18, 2026, just days after the Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act before breaking for its August recess. For accounting firms, auditors, and CFOs with digital asset exposure, the proposal carries immediate practical weight: it sets out new exemption thresholds, mandatory financial disclosures, and an ongoing reporting regime that will reshape how token issuances are structured and documented. The public comment window opens a 60-day clock that compliance teams cannot afford to ignore.
Why the SEC Acted Without Congressional Legislation
The CLARITY Act was expected to draw clear jurisdictional lines between the SEC and the Commodity Futures Trading Commission (CFTC) for overseeing digital assets. When the Senate could not advance the bill before its month-long recess, the SEC chose to press ahead with its own rulemaking rather than wait.
SEC Chair Paul Atkins acknowledged the tension directly in the agency's notice, stating that legislation "remains indispensable to enacting future-proofed rules" durable enough to survive a change in administration, while simultaneously committing the SEC to supporting Congress in delivering the CLARITY Act to President Trump's desk. The message is deliberate: the proposed rules are a bridge, not a permanent structure.
The CLARITY Act Timeline and What Remains in Play
Majority Leader John Thune has committed to taking up the CLARITY Act when senators return in mid-September. That sounds like a clear runway, but the arithmetic is tight. After the August recess, the Senate has only 14 days in session before breaking again ahead of the November elections. If a floor vote doesn't happen in that window, there are 22 additional session days before the new Congress is sworn in in January 2027. New members mean a reset of legislative priorities, making the mid-September window the most realistic near-term opportunity.
White House crypto adviser Patrick Witt reinforced the stakes at the Wyoming Blockchain Symposium, saying US regulators would "let loose" on crypto regulation if Congress fails to act. The SEC's proposal appears to be the first demonstration of that intent. For context on how the SEC's posture has evolved through these legislative delays, see our earlier analysis of how the CLARITY Act's Senate stall previously affected SEC rulemaking.
What the SEC Actually Proposed
The proposal describes what the agency calls a "tailored securities offering regime" designed to let entities raise capital through token issuances while preserving investor protections. Two elements are central to the framework: a tiered exemption structure and a safe harbor from investment contract classification.
The Tiered Exemption Thresholds
Under the proposed rules, crypto companies would be able to issue tokens under two distinct exemption tiers:
- Up to $5 million in token issuances over a four-year period
- Up to $75 million in token issuances over a rolling 12-month period
These thresholds mirror the kind of tiered approach used in traditional securities exemptions such as Regulation A and Regulation Crowdfunding, and suggest the SEC is deliberately drawing on existing securities law architecture rather than inventing a parallel regime from scratch. That framing matters for how accounting teams approach disclosure and record-keeping obligations.
The Safe Harbor from Investment Contract Treatment
The proposal includes a safe harbor that would shield qualifying cryptocurrencies from being classified as "investment contracts" under securities law. This is significant because investment contract status has historically triggered the full weight of SEC registration requirements, including prospectus obligations, ongoing reporting, and broker-dealer rules. The safe harbor would carve out a defined class of tokens from that treatment, provided issuers meet the conditions the SEC sets out.
Notably, the proposal does not include an "innovation exemption" for crypto-based stocks, which had been expected as a separate announcement. That omission narrows the scope of immediate relief for certain product structures and may prompt additional rulemaking later.
Financial Disclosure and Ongoing Reporting Requirements
Token issuers taking advantage of the exemptions would be required to provide financial statements and remain subject to ongoing reporting obligations. The proposal does not yet specify the exact accounting standards to which those financial statements must conform, which is precisely the kind of detail that will be contested during the 60-day comment period. Accounting firms advising token issuers will want to engage directly with this question in their submissions.
Accounting and Financial Reporting Implications
For firms running digital asset accounting software or managing crypto bookkeeping for issuer clients, the proposed framework introduces several layers of complexity that are worth breaking down by audience.
What Accounting Firms and Auditors Need to Assess
The threshold structure creates immediate classification questions. If a client is planning a token issuance, the firm needs to determine early whether the planned raise will fall within the $5 million four-year ceiling or the $75 million 12-month ceiling, and whether the safe harbor conditions are likely to be satisfied. Getting that wrong at the planning stage could mean a client inadvertently steps into full SEC registration territory.
The financial statement requirement is the most operationally loaded element of the proposal for practitioners. The SEC has not yet confirmed whether issuers must follow US GAAP, whether IFRS would be acceptable for foreign private issuers operating in the US market, or whether a bespoke disclosure framework will apply. Until that is clarified, firms should build their engagement letters with flexibility clauses and flag the uncertainty explicitly in any pre-issuance advice.
Ongoing reporting obligations also raise audit scope questions. If the SEC's final rules require periodic filings, audit firms will need to assess whether their existing engagement terms cover that work and whether their digital asset accounting software can support the necessary data aggregation, transaction tracing, and fair value documentation at the cadence required. Firms that haven't yet built robust crypto bookkeeping infrastructure for issuer clients are facing a tighter deadline than they may realise.
The parallel CFTC activity adds another layer. The CFTC held a scheduled Thursday meeting on crypto, AI, and prediction markets in the same week as the SEC announcement, exploring where regulatory action can complement future congressional legislation. Any dual-regulated client, one whose tokens might be treated as commodities in some contexts and securities in others, will require co-ordinated advice across both regulatory domains until the CLARITY Act resolves the jurisdictional split, if it does.
What CFOs at Digital Asset Companies Should Do Now
CFOs planning token issuances need to map their capital-raising timeline against the two threshold tiers before making any commitments to investors or advisers. The $75 million 12-month cap in particular will require careful calendar management, because the clock runs from the date of the first issuance in a rolling 12-month window, not from a fixed annual date.
Internal controls and record-keeping need to be aligned with the financial statement obligations now, even before the rules are finalised. The SEC's comment period closes 60 days after Federal Register publication, meaning final rules could follow within months. CFOs who wait for final text before updating their accounting and reporting systems will be starting too late. The digital asset accounting software a company relies on must be capable of producing issuer-level financial disclosures, not just portfolio-level transaction records.
For those tracking the broader regulatory environment, our earlier coverage of what the SEC's earlier regulatory meeting cancellation means for compliance teams provides useful context on how rapidly the agency's posture has shifted in 2026.
The Comment Period: A Genuine Opportunity for Practitioners
The 60-day comment window is not a formality. The SEC is proposing rules in a space where it lacks settled case law, where the accounting standards remain contested, and where the underlying legislative framework has not been enacted. That uncertainty makes practitioner input unusually influential at this stage.
Key Questions to Address in Comments
Accounting firms and CFOs should consider submitting comments that address the following gaps in the current proposal:
- Which accounting standards will govern the required financial statements, and whether IFRS is acceptable alongside US GAAP
- How the rolling 12-month issuance cap will be measured for issuers with multiple token classes or issuance tranches
- What "ongoing reporting requirements" will look like in practice, including frequency, format, and whether they require audited or reviewed financial statements
- How the safe harbor interacts with state securities laws, since the proposal operates at the federal level and state-level Howey analysis may still apply
The SEC's openness to comment is not unlimited. Chair Atkins has framed the proposal as a bridge to congressional action, which suggests the agency will be reluctant to expand the scope of the rules significantly beyond what is proposed. Comments that engage with the existing structure rather than advocating for a wholesale redesign are more likely to influence the final text.
Frequently Asked Questions
Does the SEC's proposal replace the CLARITY Act?
No. The SEC's proposed rules operate within the agency's existing statutory authority. The CLARITY Act, if passed, would require legislation that could override or expand the SEC's framework. Chair Atkins was explicit that the proposal is intended as a bridge until Congress acts, not a substitute for legislation.
Which token issuers would qualify for the $75 million exemption?
The proposal sets a $75 million ceiling for token issuances within a rolling 12-month period. The full eligibility conditions, including whether there are restrictions based on issuer type, token characteristics, or geographic factors, have not yet been finalised. The 60-day comment period is the appropriate moment to seek clarification on scope.
What financial statements will token issuers need to produce?
The proposal states that issuers must provide financial statements and comply with ongoing reporting requirements, but does not yet specify the applicable accounting standards or the audit level required. This is one of the most critical gaps for practitioners to raise during the comment period.
How does the safe harbor interact with commodity classification under the CFTC?
The SEC's safe harbor only addresses investment contract classification under securities law. A token that qualifies for the safe harbor could still be treated as a commodity under CFTC jurisdiction, particularly for derivatives trading. Without the CLARITY Act's jurisdictional clarity, dual-regulated assets remain a live compliance risk.
When could final rules take effect?
The comment period runs for 60 days from Federal Register publication. After that, the SEC reviews submissions and publishes a final rule, typically months later. There is no fixed deadline. If the CLARITY Act is enacted before the SEC finalises its rules, the legislative framework could supersede or substantially reshape the proposal.
Source: Cointelegraph