SEC Proposes Three-Path Safe Harbor for Crypto Fundraising

The U.S. Securities and Exchange Commission is considering a new framework that could change how crypto projects raise funds. SEC Chair Paul Atkins outlined a “three-path safe harbor” proposal on March 17, 2026. The plan introduces structured exemptions and a rule-based approach for crypto investment contracts.

Atkins said the SEC may release a formal proposal soon. The framework aims to give crypto issuers defined options while keeping disclosure requirements. At the same time, it reflects ongoing efforts to clarify how federal securities laws apply to digital assets.

The proposal builds on earlier discussions within the SEC. In particular, it connects to ideas first raised by Hester Peirce. Her earlier “Token Safe Harbor” concept focused on giving projects time to develop before facing full regulatory oversight.

Startup and fundraising exemptions define capital paths

First, the proposal introduces a startup exemption. This path would allow early-stage crypto projects to raise funds under a time-limited framework. For example, Atkins suggested a period of up to four years, with a fundraising cap near $5 million. During this time, projects would need to provide public disclosures and notify the SEC.

Next, the second path focuses on larger fundraising efforts. This exemption would allow issuers to raise significantly higher amounts. Atkins used $75 million within a 12-month period as a reference point. However, projects would need to submit detailed disclosures, including financial statements and operational information.

Both exemptions aim to create structured entry points. As a result, smaller and larger projects would follow separate regulatory tracks. At the same time, disclosure requirements remain central to both paths.

Safe harbor defines when securities rules no longer apply

The third path introduces a rule-based safe harbor for investment contracts. This part addresses when a crypto asset stops being treated as a security under federal law. According to Atkins, this happens when the issuer completes or stops key managerial efforts tied to the project.

This approach links directly to how the SEC interprets investment contracts. Instead of focusing only on the initial sale, the framework considers how projects evolve over time. Therefore, regulatory treatment may change as development progresses.

The proposal remains at an early stage. It is not yet a formal rule and will require public consultation. Still, it signals a shift toward clearer regulatory pathways for crypto fundraising in the United States.