The U.S. Securities and Exchange Commission has proposed two registration exemptions, including a $75 million annual pathway, under its new Reg Crypto framework for certain crypto investment contracts.

SEC Reg Crypto rules create two offering exemptions

The SEC said in an Aug. 18 press release that Regulation Crypto Assets would establish a tailored framework for certain investment contracts involving digital assets. The proposal follows the Commission’s March 2026 interpretation of how federal securities laws apply to crypto assets and related transactions.

Under the first exemption, an eligible issuer could offer up to $5 million in crypto investment contracts during a four-year period without completing the standard registration process under the Securities Act of 1933. The pathway would provide smaller projects with a route to raise capital while remaining subject to the framework’s conditions.

A second exemption would cover offerings of up to $75 million during any 12-month period. Issuers using the larger pathway would face extra obligations, including financial statement requirements and continued reporting after an offering.

Both routes would require issuers to provide investors with narrative disclosures based on principles specified in the proposed rules. Describing the common requirement, the Commission said issuers would need to make “certain principles-based narrative disclosures” available to their investors.

The SEC has not presented either exemption as an automatic exclusion for all token sales. Each route applies to qualifying crypto investment contracts and depends on compliance with the conditions set out in the proposal. The release does not suggest that every crypto asset or transaction would become exempt from federal securities law.

Before the proposal emerged, the Commission had scheduled an Aug. 14 open meeting to consider the offering framework. The agency later canceled the meeting because of what it called an unforeseen scheduling issue and did not immediately provide a replacement date.

As crypto.news previously reported, the rulemaking package had already entered the White House review process under RIN 3235-AN38 before the meeting was canceled. Its publication now moves the plan into the public rulemaking process rather than putting the exemptions into immediate effect.

Conditional safe harbor could change token treatment

Alongside the two offering exemptions, Reg Crypto proposes a conditional safe harbor from the term “investment contract” within the definitions of a security under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Under the proposal, a crypto asset initially connected to an investment contract could cease to receive that treatment when the arrangement satisfies the safe harbor’s conditions. The framework therefore addresses the legal agreement surrounding a token rather than treating the asset as permanently tied to one securities classification.

The approach follows the SEC’s March interpretation, which addressed when a crypto asset may be sold as part of an investment contract and when that contractual relationship may end. Earlier coverage of the interpretation noted that the SEC and Commodity Futures Trading Commission presented the guidance as a complement to congressional work, not a replacement for legislation.

For U.S. token issuers, the distinction affects how projects could structure fundraising and later transactions. Investors would also receive different levels of information depending on which exemption the issuer uses, with the $75 million pathway carrying financial statements and ongoing reports.

The Commission further proposed overriding state registration and qualification requirements for offers and sales covered by the exemptions. According to the release, the preemption would also reach certain secondary-market transactions that meet the framework’s requirements.

Such federal preemption would reduce the need for qualifying issuers to complete separate securities registration processes in individual states. The proposal would not, however, remove every state-level rule that could apply to a project, because its stated preemption concerns registration and qualification requirements for covered transactions.

SEC rules cannot replace the CLARITY Act

Reg Crypto arrives while the Digital Asset Market Clarity Act remains pending in the Senate. The two measures cover overlapping parts of U.S. crypto policy but rely on different legal routes and do not have the same scope.

Using its existing authority, the SEC can set exemptions and reporting conditions for investment contracts governed by federal securities laws. Congress would have to change the statutory division of authority between the SEC and CFTC or establish a complete market structure regime for digital assets.

The CLARITY Act would address that division by defining categories of digital assets and assigning oversight between the two regulators. Reg Crypto concentrates on securities offerings, issuer disclosures, and the circumstances under which an investment-contract relationship may end.

Recent CLARITY Act coverage reported that the Senate left for its August recess without holding a floor vote. Senate Majority Leader John Thune filed cloture before the break, leaving the chamber to consider the procedural motion after lawmakers return.

The House passed its version of the legislation by a 294–134 vote in July 2025. In the Senate, the measure needs 60 votes to overcome a filibuster before lawmakers can proceed to the remaining stages of consideration.

Reg Crypto would not settle every issue covered by the bill, including the full boundary between securities and commodities oversight or a federal framework for spot crypto trading. The SEC proposal instead provides an agency-led route for a narrower group of transactions while the congressional process remains unfinished.

Public comment will shape the final SEC framework

Stakeholders will have 60 days to comment on Reg Crypto after the proposal enters the prescribed publication process. Issuers, investors, trading platforms, legal professionals, and other members of the public may submit responses addressing the exemptions, disclosures, and safe-harbor conditions.

The proposed rules are not yet final and do not immediately change the registration duties of crypto issuers. After reviewing the submissions, the SEC may revise the text before deciding whether to adopt a final version.

Separately, the Commission has been developing an Innovation Exemption for tokenized securities and onchain trading. White House meeting coverage cited Galaxy Digital research head Alex Thorn as saying he expected the SEC to publish Reg Crypto, the Innovation Exemption, or both within weeks, regardless of the CLARITY Act’s outcome.

The Innovation Exemption would require its own regulatory process and is not part of the two fundraising exemptions announced under Reg Crypto. The SEC has not included a final implementation date for that separate framework in the Reg Crypto release.

Cypherpunk Technologies has acquired a 4.2 GSol/s Zcash mining fleet for $33.33 million, giving the Nasdaq-listed company about 18% of the network’s total computing power.

Cypherpunk Technologies said on Aug. 18 that it had launched Cypherpunk Mining after purchasing the equipment and related hosting agreements from entities affiliated with Winklevoss Capital.

The fleet consists of Bitmain Z15 Pro machines already operating at facilities across the United States. With an aggregate Equihash computing capacity of about 4.2 GSol/s, the company described the operation as the largest active Zcash mining fleet in the world.

About 43,800 ZEC are distributed to miners across the network each month, according to the company. Cypherpunk’s 18% share of the current hashrate puts its estimated production at roughly 7,800 ZEC per month, although the actual amount can change with network difficulty and competing computing power.

Will McEvoy, chief investment officer at Cypherpunk, said in an Aug. 18 X post that the business was already generating positive cash flow. He added that the company entered the operation without debt and plans to add its own data center and power assets over time.

Cypherpunk paid with a warrant tied to 43.29 million shares

An Aug. 18 SEC filing identified the seller as Moria Mining LLC and the receiving entity as Cypherpunk Mining LLC, a wholly owned subsidiary of Cypherpunk Technologies. Winklevoss Treasury Investments LLC, an affiliate of Moria Mining, also signed the asset purchase agreement.

Under the agreement, Cypherpunk acquired the mining machines, their associated hosting contracts, and other rights attached to the operation. The buyer also assumed liabilities connected with the purchased assets from the Aug. 17 closing date, excluding liabilities specifically left with the seller.

Rather than paying cash, Cypherpunk issued Winklevoss Treasury Investments a pre-funded warrant to purchase 43,290,042 common shares. The warrant carries an exercise price of $0.001 per share, while the transaction valued Cypherpunk stock at $0.77 per share.

Exercise of the warrant is subject to a 19.99% beneficial ownership ceiling. Winklevoss Treasury Investments may adjust the limit after giving the company notice, but it cannot raise the cap beyond 19.99%, according to the filing.

Cypherpunk must also seek shareholder approval at its next annual meeting before issuing more than 5,377,442 shares through the warrant. The threshold represents about 4.99% of the common stock outstanding before the purchase agreement was signed and addresses restrictions under Nasdaq listing rules.

If shareholders do not approve the proposal at the first meeting, the filing requires Cypherpunk to continue seeking approval at later annual meetings. Winklevoss Treasury Investments must vote its eligible Cypherpunk securities in favor of the proposal.

“Up until now, investors have had limited options for Zcash mining exposure,” Cameron and Tyler Winklevoss said in the company announcement.

Zcash mining adds tokens to Cypherpunk’s treasury

Mining gives Cypherpunk a second route for increasing its ZEC holdings without relying entirely on purchases in the open market. The company currently owns 323,394.38 ZEC, representing about 1.92% of the cryptocurrency’s circulating supply, and has set a target of reaching 5%.

Cypherpunk began building that position after the former biotechnology company Leap Therapeutics changed its name and business strategy in 2025. As crypto.news previously reported, the company initially used $50 million from a Winklevoss Capital-led private placement to acquire 203,775 ZEC.

A later purchase took its holdings to 314,185 ZEC by May 2026. At the same time, Cypherpunk invested $5 million in Zcash Open Development Labs, an organization working on the Zcash protocol and the Zodl wallet alongside backers including Coinbase Ventures, a16z crypto, and Paradigm.

The acquired mining fleet increases the company’s exposure to both the price of ZEC and the economics of producing it. Cypherpunk said the operation can supply tokens for its treasury, fund investments in privacy technology, and provide cash for additional expansion.

According to McEvoy’s post, one megawatt of current-generation Zcash machines produces about $450 in revenue per megawatt-hour under current market conditions. He compared the figure with approximately $223 for AI data center colocation and $133 for Bitcoin mining.

McEvoy also put the equipment cost for one megawatt of Zcash mining capacity at about $2.4 million, compared with roughly $10 million to $12 million for AI infrastructure. The figures are company estimates and remain sensitive to changes in ZEC’s price, mining difficulty, equipment performance, hosting charges and electricity costs.

Cypherpunk’s announcement placed the addressable annual Zcash mining market above $250 million at current token prices. The company said current production costs remain below the spot price of ZEC, although its SEC disclosure classified future hashrate, mining income, profitability, and comparative economics as forward-looking statements.

U.S. investors gain listed exposure to Zcash production

Because Cypherpunk trades on the Nasdaq Capital Market under the ticker CYPH, American investors can obtain indirect exposure to Zcash mining through a publicly listed stock. The company’s share price, however, remains tied to operating costs, warrant dilution, ZEC price movements, and risks affecting the underlying network.

Regulated Zcash exposure in the United States may also expand through Grayscale. In May, the asset manager filed to convert its existing Zcash Trust into a spot exchange-traded fund on NYSE Arca under the ticker ZCSH.

The proposed fund held 391,103.89 ZEC worth about $99.4 million as of March 31, according to its filing. Unlike shielded Zcash users, the trust would keep its tokens in transparent custody with Coinbase Custody, while BNY Mellon would serve as administrator.

Zcash and companies tied to the token remain exposed to network-specific risks. In June, disclosure of a critical flaw in the Orchard shielded pool sent ZEC down as much as 45% and pulled Cypherpunk shares 37% lower. A subsequent security report said the vulnerability could have allowed undetectable counterfeit ZEC before developers deployed an emergency repair.

Shielded Labs said it found no evidence that anyone used the flaw on the main network, but Zcash’s privacy design prevented researchers from proving that exploitation had never occurred. Developers later restored Orchard with corrected code through a network upgrade.

Cypherpunk has appointed Kevin Zhang as head of mining to manage the new operation. Zhang began mining Bitcoin in 2014 and Zcash in 2016, later building mining facilities in North America and helping Foundry develop its Bitcoin mining pool and crypto mining operations.

The U.S. Securities and Exchange Commission (SEC) has proposed new rules aimed at creating a “clear and fit-for-purpose framework” for certain investment contracts involving crypto assets—steps regulators are taking after Congress failed to advance a broad market-structure bill ahead of a month-long recess.

In a Tuesday notice, the SEC said its proposal would establish a “tailored securities offering regime” designed to let eligible entities raise capital while maintaining investor protections. The move comes as lawmakers consider the Digital Asset Market Clarity (CLARITY) Act, which has faced delays in the Senate.

Key takeaways

• The SEC’s proposal focuses on crypto assets that fall within the definition of investment contracts, using a tailored securities offering structure.
• There is no “innovation exemption” in the SEC’s draft rules for crypto-linked securities offerings, a concept that had been expected.
• The plan includes token issuance thresholds and a safe harbor intended to help certain cryptocurrencies avoid being classified as investment contracts.
• The SEC is inviting public comments for 60 days after the proposal is published in the Federal Register.

SEC’s proposed “tailored securities offering regime”

The SEC’s filing, described in a notice released Tuesday, outlines a framework meant to bring more specificity to how some crypto-related offerings could be treated under federal securities laws.

According to the SEC, the goal is to deliver a securities offering regime that is “clear and fit-for-purpose” for “certain investment contracts involving crypto assets.” The regulator said the approach is intended to preserve investor protections while also offering a more structured pathway for capital raising.

SEC Chair Paul Atkins framed the proposal as part of a broader push to keep regulatory rules from being undone later. In remarks shared in a statement, Atkins said “[l]egislation remains indispensable to enacting ‘future-proofed’ rules of the road that are durable enough to protect the work we are undertaking today from being unwound by a future rogue regulator,” adding that the SEC would continue to support Congress in delivering CLARITY.

No innovation exemption included—and why that matters

Notably, the SEC’s draft rules do not include an “innovation exemption” for tokenized or crypto-based stocks—an idea that had been widely anticipated ahead of the announcement. Earlier coverage from Cointelegraph had reported expectations of such an exemption for tokenized stock trading.

For market participants, the absence of an innovation carve-out could mean fewer pathways for certain crypto-based equity-related products that might otherwise have been treated differently from conventional securities offerings. It also underscores that, at least for now, the SEC is leaning toward a securities-framework approach rather than a broader expansion of exemptions for tokenized instruments.

Token thresholds, reporting obligations, and a safe harbor

The SEC’s proposal includes specific parameters for how token issuers could qualify for exemptions within the securities offering regime. The draft rules reportedly offer exemptions for issuance of up to $5 million in tokens over a four-year period, and up to $75 million during a 12-month period.

In addition, the notice describes ongoing requirements for qualifying issuers. The SEC said token issuers would be required to make financial statements and would be subject to “ongoing reporting requirements.” This combination of exemption thresholds and continued disclosure obligations is a critical feature: it suggests the SEC’s goal is not to remove oversight, but to recalibrate it into a more tailored structure.

The filing also includes a safe harbor meant to exempt cryptocurrencies from being treated as “investment contracts.” While the proposal’s details are designed to clarify when certain digital assets should not be viewed through the investment-contract lens, the exact boundaries of that safe harbor will likely become a focal point during the rulemaking process.

Regulatory timing: SEC proposal amid CFTC crypto discussions

The SEC’s move arrives shortly before a scheduled Thursday meeting of the U.S. Commodity Futures Trading Commission (CFTC) that will address crypto alongside AI and prediction markets. The CFTC has said it plans to focus on “areas where regulatory action can complement future congressional legislation,” suggesting it is preparing for a scenario where statutory clarity is delayed but agencies still move forward with their own rulemaking.

Tuesday’s SEC announcement also disrupted Atkins’ previously scheduled appearance at the Wyoming Blockchain Symposium, where it had been expected he would speak. At the event, White House crypto adviser Patrick Witt said regulators would “let loose” on crypto regulation if Congress is unable to move forward on the CLARITY Act.

While the SEC and CFTC operate in different legal lanes, the proximity of these developments highlights a pattern: even as Congress stalls on broader market-structure legislation, U.S. agencies are continuing to develop proposals within their existing authority.

Where CLARITY stands in the Senate timetable

The SEC’s proposal is also tied to the near-term uncertainty surrounding CLARITY’s legislative prospects. Before the Senate broke for an August state work period, Majority Leader John Thune filed cloture on a motion to take up the CLARITY crypto bill when lawmakers return in mid-September.

After the August recess, senators would have only 14 days in session before breaking again ahead of the November election. If the leadership cannot secure a floor vote before then, the Senate would have another 22 days in session before 2027, when a new Congress is sworn in.

In other words, the legislative window for CLARITY appears narrow—making the SEC’s rule proposal more consequential for the market’s near-term expectations. Even if Congress later passes CLARITY, the SEC’s draft rules could influence how firms structure token offerings and disclosure practices during the interim.

With the SEC offering a 60-day comment period after the proposal is published in the Federal Register, the most immediate watch item is how issuers and industry groups respond—particularly on the safe harbor boundaries, the disclosure burden implied by ongoing reporting, and whether the lack of an “innovation exemption” will trigger renewed calls for carve-outs as CLARITY’s Senate timeline remains tight.