The U.S. Securities and Exchange Commission plans to issue its first crypto rule during Chairman Paul Atkins’ tenure in July. Regulation Crypto opens a legal path for startups to raise funds—but the agency head is working under severe time pressure.
Essence of the Proposed Mechanism
The new rule exempts early crypto projects from the requirement to register their issuance as securities for up to four years and creates a protective mechanism for teams gradually transferring control over their token.
Atkins outlined the main parameters back on March 17 at the DC Blockchain Summit. The project gets a four-year window during which it is allowed to raise up to $5 million annually before its network is considered sufficiently developed. In addition, there is a separate option—raising up to $75 million through investment agreements tied to specific tokens. Immunity from securities status occurs when the team fulfills its stated management obligations to network users.
The crowdfunding component is based on Article 103 of the Senate’s CLARITY bill and will be implemented through the Securities Act of 1933. The mechanism for DeFi projects operates under a different legal basis—the Exchange Act of 1934. This is not a bureaucratic accident but a calculated move: two different legal foundations cover two different types of claims that could arise against crypto projects.
The document is currently being reviewed by the Office of Information and Regulatory Affairs at the White House—a division of the budget office that approves the publication of regulatory acts.
Why a Law Is Needed, Not Just Guidance
The rush is easy to explain. Almost everything the Commission has achieved in the crypto sphere so far—staff instructions, explanatory letters, waivers of enforcement—rests on the good faith of the next leadership team. A single internal document could undo years of such work.
With a full-fledged federal rule, the situation is different. Once published in the official register, it cannot simply be revoked with the stroke of a pen—the entire cycle of public discussion and re-approval would have to be repeated, which takes years. A reversible initiative and an established rule are fundamentally different things in terms of durability. This explains Atkins’ persistence, which he has shown since the very first announcement in the spring.
First Limiter: Departure of Commissioner Peirce
Two timing factors are working against the SEC chairman simultaneously. The first is related to Hester Peirce, who oversees the crypto division within the Commission. Her idea of a safe harbor for tokens, proposed back in 2020, formed the basis of the current project.
Peirce is leaving her post in November—she plans to teach law at Regent University. Formally, her term expired in June of last year, and she remains in office solely until the Senate confirms a replacement. If the rulemaking process is not completed before her departure, the new leader will have the opportunity to block the initiative, rewrite it, or shelve it entirely.
Second Limiter: Political Volatility
The second factor is much broader than a single appointment. The current administration has been in power for two years, and any policy issued as a departmental recommendation rather than a strict rule risks dissolving if the country’s political course changes.
At the April digital assets conference, Atkins put it bluntly: the regulator’s decision must be so robust that a future leadership team cannot easily get rid of it. This is what drives his race—to make it before either of the two deadlines expires.
Final Filter: Congressional Vote
A separate CLARITY bill, which divides crypto regulatory powers between the SEC and the Commodity Futures Trading Commission, already passed the House of Representatives on July 17, 2025, and the Senate Banking Committee on May 14, 2026, by a margin of 15 to 9. For the document to have a chance to become law this year, it must pass a final vote by August—a narrow window before the fall midterm elections.
There is no unity among market participants. Citadel Securities insists on the classic procedure with full public hearings, believing that simplified exemptions reduce trading safety and weaken oversight. The Blockchain Association holds the opposite view—the standard rulemaking process is excessive since the Commission has previously solved similar issues through the exemption system. Meanwhile, the SEC’s agenda for this year includes separate initiatives on exchange and broker oversight, as well as a cooperation agreement with the Commodity Futures Trading Commission.
What Determines the Rule’s Durability
Whether Regulation Crypto remains sustainable policy for years to come depends on what can be passed through a Congressional vote before the fall elections. Even publication of the rule in July does not guarantee its stability: the final legal environment will largely be determined by whether CLARITY passes its final reading within the allotted narrow window.
Whether Atkins manages to officially register the document before Peirce’s November departure will determine whether the rule receives strong protection from revision. If not, the further fate of the rule will be in the hands of whoever takes the vacant seat and their personal stance on digital assets.
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