The CFTC has opened a 45-day comment period on proposals that would double the small-pool exemption threshold to $800,000 and ease registration rules for some fund advisers.

CFTC proposal would reduce duplicate fund registration

The Commodity Futures Trading Commission said in an Aug. 18 regulatory announcement that it had proposed amendments to Part 4 of its rules, which govern commodity pool operators, or CPOs, and commodity trading advisers, known as CTAs.

Under the proposal, certain investment advisers already registered with the Securities and Exchange Commission could avoid separate CPO registration for qualifying commodity pools. The exemption would apply only when the pool meets several conditions, including limits on who may invest.

A commodity pool combines money from multiple participants to trade futures, options, swaps, or other commodity interests. Its operator generally must register with the CFTC unless an exemption applies, while a person who provides trading advice may also have to register as a CTA.

SEC-registered advisers can fall under both regulatory systems when the private funds they manage trade commodity interests. According to the CFTC, requiring full registration under both systems may produce overlapping compliance duties without providing enough additional regulatory benefit.

“By continuing to address overly burdensome and duplicative rules for its registrants, the CFTC is delivering on its mandate to promote U.S. market competitiveness,” CFTC Chairman Michael S. Selig said.

Selig added that the agency intended to reduce compliance costs for American businesses while preserving market integrity.

The proposed exemption would not remove all regulatory requirements. Advisers seeking relief would still need to satisfy the SEC’s rules under the Investment Advisers Act, including applicable conduct, examination, disclosure, and reporting requirements.

CFTC exemption would cover pools for sophisticated investors

Proposed Regulation 4.13(a)(4) would limit the CPO exemption to SEC-registered investment advisers operating eligible pools for defined groups of sophisticated investors.

Natural-person participants would generally need to fall within Qualified Eligible Person categories that do not require them to pass the CFTC’s portfolio test. Eligible entities could include QEPs and certain accredited investors listed under the SEC’s Regulation D.

Rather than changing the financial thresholds used to qualify as a QEP, the proposal uses existing investor categories to determine which pools may receive registration relief.

The CFTC previously increased the portfolio thresholds attached to some QEP categories in 2024. Under the updated standard, a person subject to the test may qualify by owning at least $4 million in securities and other assets, holding at least $400,000 in required margin and option premiums, or meeting a combination of the two tests.

Published in September 2024, the final rule doubled the previous thresholds of $2 million and $200,000. Compliance with the new amounts began six months after the rule appeared in the Federal Register.

Separate conditions in the new proposal would require interests in eligible pools to remain exempt from Securities Act registration. Public marketing in the United States would generally be restricted, although pools using Rule 506(c) could conduct general solicitation when every purchaser is an accredited investor and the issuer takes reasonable steps to verify that status.

Where SEC rules require a Form PF filing for an eligible private fund, the adviser would also need to file that form to claim the proposed CFTC exemption. Form PF supplies regulators with information used for investor protection and systemic-risk monitoring.

The CFTC and SEC already operate under a memorandum of understanding that allows them to share Form PF information. The commission said the arrangement could preserve access to fund data without making advisers submit overlapping reports to both agencies.

Eligible advisers would still have to file an exemption notice through the National Futures Association’s online registration system. Annual notices would be required to confirm continued reliance on the exemption, along with updates when filed information becomes inaccurate or incomplete.

Proposed rules would formalize temporary CFTC relief

The plan would place parts of existing staff relief into the CFTC’s regulations, giving qualifying advisers a formal rule instead of leaving them dependent on a no-action position.

CFTC Market Participants Division Letter 25-50, issued in December 2025, provided interim registration relief for certain SEC-registered advisers managing pools restricted to QEPs. The letter covered some advisers who would otherwise need to register as CPOs or CTAs and also allowed eligible firms to withdraw existing registrations.

Staff issued the relief after the commission had removed a similar QEP exemption in 2012. The earlier exemption, adopted in 2003, allowed operators of certain privately offered pools to avoid registration when participation was restricted to qualifying investors.

According to the new proposal, applying Letter 25-50 alongside National Futures Association processes proved complex and time-consuming. Converting the policy into Regulation 4.13(a)(4) would establish a public set of eligibility conditions adopted through the federal notice-and-comment process.

The CFTC said a final rule would supersede specified no-action positions, including relief provided through Letters 25-50 and 26-06. Until the commission adopts a final rule, however, the proposal does not itself replace the current registration framework or the staff letters.

A related amendment to Regulation 4.14 would extend CTA registration relief to qualifying advisers serving pools covered by the proposed CPO exemption. The CFTC described the CTA change as a limited expansion because many affected advisers already qualify for relief when serving other permitted clients.

Small-pool exemption threshold could double

For smaller fund operators, the proposal would raise the maximum gross capital contributions allowed under the small-pool exemption from $400,000 to $800,000.

Regulation 4.13(a)(2) currently permits an exemption for operators whose pools have no more than 15 participants and whose total gross capital contributions across all operated or planned pools do not exceed $400,000, subject to exclusions for certain contributions.

The commission last adjusted the monetary limit in 2003, when it doubled the threshold from $200,000 to $400,000. Using the Consumer Price Index for All Urban Consumers, the agency calculated that $400,000 in January 2003 had the same purchasing power as approximately $735,097 in July 2026.

Rounding that figure to $800,000 would provide a simpler limit for fund operators, according to the proposal. The 15-participant cap would remain unchanged, as would existing rules that exclude specified contributions from the calculation.

Operators using the expanded exemption would still need to complete initial and annual notice filings. Anti-fraud provisions of the Commodity Exchange Act would also continue to apply to exempt pools.

Crypto policy remains on another CFTC track

The Part 4 proposal does not create a registration system for cryptocurrency platforms or change the CFTC’s authority over digital-asset spot markets. Crypto-focused private funds may still be affected when their trading activity makes them commodity pools, but eligibility for relief would depend on the same conditions applied to other qualifying funds.

Meanwhile, crypto.news previously reported that the CFTC’s first Innovation Advisory Committee meeting will take place on Aug. 20. Its agenda includes crypto assets, artificial intelligence, and prediction markets, with public statements accepted through Aug. 27.

The committee’s crypto session will examine federal market-structure questions, overlapping regulatory authority, customer protection, and market integrity. It will not vote on the CPO and CTA proposal or adopt binding digital-asset rules.

Congress is considering separate legislation that could alter how the SEC and CFTC divide digital-asset oversight. A May review of the CLARITY Act explained that the bill would give the CFTC authority over specified digital commodities while leaving investment-contract assets under SEC oversight.

For the Part 4 rulemaking, written comments must identify RIN 3038-AF61 and reach the Commission within 45 days after the proposal is published in the Federal Register. The CFTC has requested feedback on the proposed exemptions, their eligibility conditions, expected costs and benefits, and the increase in the small-pool capital limit.

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.