SEC Proposes New Offering Framework for Crypto Assets

The SEC published proposed rules on August 21, 2026 that would create a dedicated securities offering framework for crypto assets, provisionally named Regulation Crypto Assets. If adopted, the rules would let issuers raise capital under federal securities law through two new exemptions and a conditional safe harbor, while preserving disclosure requirements, anti-fraud protections, anti-manipulation rules, and ongoing SEC oversight. The public comment window closes October 20, 2026. For accounting firms, CFOs, and auditors advising crypto issuers, the proposal signals that crypto financial statements and SEC-style reporting are no longer a distant prospect but an imminent compliance planning task.

Why This Proposal Matters for Crypto Financial Statements

Until now, crypto asset issuers that wanted to raise capital from US investors faced a binary choice: register fully under the Securities Act of 1933, or rely on narrow private-placement exemptions that cap the investor pool and restrict resale. The SEC's new proposal carves out a third path, one calibrated specifically to the development timelines and governance realities of crypto projects. It does not change how crypto US GAAP accounting or ASC 350-60 treats digital assets on the balance sheet, but it does layer on a set of SEC reporting obligations that will force issuers to meet a much higher bar for financial statement quality.

The broader regulatory context

The proposal follows a period of sustained SEC engagement with the crypto sector, including earlier staff guidance on token classifications and token buyback mechanics. The agency has signalled it wants a workable on-ramp rather than a blanket exemption, and the two-tier structure in this proposal reflects that intent. Firms advising issuers should read it alongside existing FASB crypto fair value guidance under ASC 350-60 and, where international operations are in scope, the IFRS Interpretations Committee agenda decisions on IFRS crypto assets.

The Startup Exemption: Up to $5 Million Over Four Years

The first of the two proposed exemptions targets early-stage issuers. A project could raise up to $5 million over a period of up to four years without registration, subject to a defined set of conditions. The exemption is one-time and non-exclusive, meaning a project cannot return to it a second time, though it can pursue other capital-raising routes concurrently.

Filing mechanics: Form NOR and Form TR

Two new forms anchor the startup exemption. Form NOR (Notice of Reliance) must be filed publicly at the start of the exemption period. It functions as the issuer's entry ticket, putting the market on notice that the project is operating within the exemption's boundaries. Form TR (Transition Report) is filed at the end of the period and reports on whether the issuer has satisfied the safe harbor conditions described below and on the project's overall status.

The certification requirements attached to both forms are substantive. The issuer's finance and legal teams will need to have governance, disclosure, and development-milestone documentation in order before the first filing date, not after. Auditors and accounting advisors should begin gap assessments as soon as a client signals interest in this route.

Investor protection conditions

Even within the exemption, issuers remain subject to anti-fraud and anti-manipulation provisions, ongoing status reporting, and the obligation to disclose whether safe harbor conditions are being met. These are not light-touch requirements. Any issuer whose internal controls, books, or record-keeping are not already organised to support periodic reporting will face a material compliance build-out.

The Fundraising Exemption: A Two-Tier Structure

The second exemption is designed for larger raises and is modelled in part on Regulation A, which allows smaller public offerings without full Securities Act registration. The proposal introduces a two-tier structure, with different disclosure and financial reporting thresholds at each tier.

Disclosure and financial reporting requirements

At both tiers, issuers must file offering materials publicly. Those materials must include narrative disclosures, a discussion of financial condition, and financial statements. The ongoing reporting obligations that follow a completed offering include annual, semiannual, and current (event-driven) reports tailored to covered investment contracts. This is functionally similar to the Exchange Act reporting regime, scaled for crypto issuers.

For accounting firms, the phrase "financial statements" in a public SEC filing carries significant weight. Depending on the tier and offering size, audit or review requirements are likely to apply. Firms that have not yet built or tested workflows for preparing crypto financial statements under US GAAP, including fair value measurement under ASC 820 and the recognition and derecognition rules in ASC 350-60, should treat this as a near-term capability gap.

Early engagement with auditors and advisors

The SEC's proposal explicitly flags that issuers should evaluate whether their financial reporting, audit, and disclosure processes can support the requirements before committing to a larger raise. That framing is significant: the agency is signalling that readiness, not intent, is the threshold question. Accounting advisors who can map a client's current state against the proposed requirements and quantify the gap will provide the most actionable value at this stage.

The Conditional Safe Harbor: When a Token Exits "Investment Contract" Status

The proposal's most consequential provision for securities law classification is the conditional safe harbor under proposed Rule 400. When all conditions are satisfied, the covered investment contract is deemed to have ceased to exist, and the related crypto asset is treated as sitting outside the "investment contract" and "security" definitions in the Securities Act and Exchange Act. In practical terms, the token graduates from a regulated security to an asset that can trade without the full weight of federal securities law.

Conditions for reliance

Two primary conditions must be met. First, the issuer must have completed or permanently ceased all essential managerial efforts it represented or promised to investors. Second, the issuer must not be making any new representations or promises and must not intend to undertake new essential managerial efforts for the crypto asset. Both conditions are fact-specific. The SEC's framing centres on the continuing relationship between the issuer's promised managerial efforts and the token, which maps closely to the Howey test's "efforts of others" prong.

Form TR as the exit mechanism

To rely on the safe harbor, an issuer files Form TR identifying the covered investment contract and the related crypto asset, certifies satisfaction of all Rule 400(a) conditions, and provides supporting analysis. The certification is not a checkbox exercise. It requires a documented factual record that the managerial effort obligation has been fully discharged. Legal, finance, and governance teams will need to work together to build and maintain that record throughout the project's development cycle.

State Law Preemption and Secondary Market Implications

The proposal would designate purchasers of covered investment contracts issued under Regulation Crypto Assets as "qualified purchasers" under the Investment Company Act. This designation makes those offerings federally covered securities, which preempts state securities law registration and qualification requirements. Practically, that means an issuer can raise capital under a single federal framework rather than navigating a patchwork of blue-sky law regimes across fifty states.

The preemption would also extend to certain secondary market transactions involving covered investment contracts, provided the issuer continues to meet its filing, disclosure, and reporting obligations. That conditionality is important: a lapse in ongoing reporting could strip the preemption protection from secondary trades, exposing both the issuer and trading venues to state law liability.

Accounting and Audit Implications for Firms and CFOs

This proposal does not amend ASC 350-60 or any other US GAAP standard. The fair value measurement rules for crypto assets, the recognition and impairment framework, and the disclosure requirements in FASB's 2023 amendments remain unchanged. What the proposal does is create a new population of crypto asset issuers who will need SEC-quality financial statements and ongoing reporting infrastructure, many of whom currently have neither.

B2B: what accounting firms and auditors should do now

Accounting firms and auditors advising crypto issuers have a narrow window before the comment period closes on October 20, 2026 and the rulemaking process potentially accelerates. The immediate priorities are:

• Identify clients that are active or prospective crypto issuers and assess which exemption tier is most likely to be relevant.
• Review existing books, records, and internal control frameworks against the disclosure and financial statement requirements proposed for each tier.
• Assess audit readiness: do current engagement teams have the technical capacity to audit token issuance accounting, digital asset fair value measurements, and the on-chain transaction records that underpin crypto financial statements?
• Consider whether to submit a comment letter. The SEC's comment process is a genuine opportunity to shape the final rules, particularly on financial statement thresholds and audit requirements by tier.
• Track the interaction between this proposal and existing SEC staff guidance on token classification, which affects how the underlying asset is characterised on the balance sheet.

B2B: CFO and treasury considerations

CFOs at companies considering a token issuance under either exemption need to think about the proposal in terms of resource requirements, not just regulatory permission. The filing, disclosure, and ongoing reporting obligations are analogous to a scaled-down version of being a public reporting company. Treasury teams that are comfortable with private-placement documentation will face a steeper learning curve on SEC-style periodic reporting. Budgeting for audit fees, legal fees, and the internal headcount or systems needed to support Form NOR, Form TR, and ongoing reports should begin now, before the final rules are adopted.

For firms that already hold crypto assets on the balance sheet and account for them under ASC 350-60's fair value model, the proposal adds a layer of securities law compliance on top of the existing accounting framework. The two are not in conflict, but they do require different teams with different skill sets. Coordination between the accounting function, legal counsel, and investor relations will be critical.

The proposal also intersects with related SEC activity on crypto. For context on how the agency has approached staff-level crypto guidance in parallel with this rulemaking, see our earlier coverage of the SEC staff guidance on crypto assets and the SEC crypto FAQ on token buybacks and network upgrades.

Next Steps and Comment Deadline

The proposal is not yet law. It becomes effective only if the SEC adopts final rules after reviewing public comments. The comment period closes October 20, 2026. Accounting firms, auditors, CFOs, and in-house counsel with a stake in the outcome should consider submitting comments, particularly on the financial statement and audit requirements at each tier of the fundraising exemption.

The practical checklist for firms advising issuers in the meantime:

• Map the client's current disclosure and reporting capability against the proposed Form NOR and Form TR requirements.
• Evaluate whether existing financial statement preparation processes meet the quality standard implied by a public SEC filing.
• Assess audit and review readiness for the fundraising exemption tiers.
• Model the ongoing compliance cost of annual, semiannual, and current reporting under the proposed framework.
• Monitor the comment period and the SEC's response to industry feedback before finalising any capital-raising strategy that depends on this framework.

Source: Forvis Mazars

Frequently Asked Questions

What is the SEC's proposed Regulation Crypto Assets?

It is a set of proposed rules published by the SEC on August 21, 2026 that would create a tailored offering framework for crypto assets. The framework includes a startup exemption allowing raises of up to $5 million over four years, a two-tier fundraising exemption modelled on Regulation A, and a conditional safe harbor that can remove a token from the "investment contract" and "security" definitions once the issuer has completed its promised managerial efforts.

How does the startup exemption differ from the fundraising exemption?

The startup exemption is capped at $5 million and lasts up to four years. It is a one-time, non-exclusive relief intended for early-stage projects. The fundraising exemption has no stated dollar cap in the source materials and follows a two-tier structure that requires public disclosure of offering materials, financial statements, and ongoing periodic reports, making it more suitable for larger, more mature raises.

Does the proposal change how crypto assets are accounted for under US GAAP or IFRS?

No. The proposal is a securities law rulemaking, not an accounting standard update. The existing FASB guidance under ASC 350-60, which requires fair value measurement with changes recognised in net income, continues to apply. Similarly, IFRS Interpretations Committee positions on crypto assets remain unchanged. What the proposal does is create new SEC filing and financial statement obligations for issuers using the exemptions.

What is the conditional safe harbor under Rule 400, and why does it matter?

Rule 400 would allow a crypto asset to be deemed outside the "investment contract" and "security" definitions once an issuer has completed or permanently ceased all essential managerial efforts it promised to investors and is not undertaking any new ones. This is significant because it provides a defined exit from securities law classification for a token, removing ongoing registration and reporting obligations for secondary trading. The issuer must file Form TR and certify compliance with all conditions to rely on the safe harbor.

When does the comment period close, and should firms submit comments?

The SEC's public comment period closes October 20, 2026. Accounting firms, auditors, and CFOs with views on the financial statement thresholds, audit requirements, or ongoing reporting obligations at each tier of the fundraising exemption have a genuine opportunity to influence the final rules. Submitting a comment letter is advisable for any firm whose clients are likely to use the proposed framework.