The U.S. Securities and Exchange Commission (SEC) has unveiled its long-awaited Regulation Crypto Assets proposal, designed to create clear and practical conditions for investment contracts tied to crypto assets. This initiative, in essence, offers for the first time a formalized and legal mechanism for token issuers to exit the scope of securities law.

The question of exactly how a digital asset can cease to be considered a security was the main sticking point in the years-long legal battle between the SEC and Ripple over XRP. Now, the regulator is proposing not just abstract clarifications, but specific, codified conditions for such a transition.

What the new SEC rules offer token issuers

The proposal provides two paths for exemption from registration under U.S. securities law:

  • One-time option: allows raising up to $5 million in total over four years.
  • Alternative option: permits raising up to $75 million within any 12-month period.

Both paths require issuers to provide investors with simple and clear explanations of the project's essence. Projects using the larger quota will additionally be required to publish financial statements and file ongoing reports. Federal regulation will take precedence over state law and will preempt individual state requirements for such primary offerings and certain secondary trades.

In its logic, the structure resembles the ICO (initial coin offering) era, when projects raised billions through public sales, but that market was later shut down by regulators. Now, maximum amounts and transparency requirements are set from the start, from day one.

The package continues the joint token classification published by the SEC and the U.S. Commodity Futures Trading Commission (CFTC) on March 17. That clarification explained how a crypto asset that is not a security can enter or exit an investment contract — the legal form that causes a token sale to fall under securities law. Public comments on the new proposal will be accepted for 60 days after publication in the Federal Register.

The question that made the XRP case famous has received a written answer

The SEC sued Ripple in 2020, alleging that XRP sales violated securities registration requirements. Judge Analisa Torres ruled in 2023 that XRP itself is not a security, but certain institutional transactions violated the law. The case concluded in August 2025.

That ruling created a problem that all projects now face after Ripple. A token could only obtain an exemption from security status through a court decision, but until now there was no clear algorithm for exiting without judicial involvement. The new safe harbor offers the missing mechanism.

Once a team fulfills or officially terminates the stated managerial work for buyers, the asset will no longer fall under the definition of an investment contract.

"Consistent with the Commission's prior guidance, the current proposal also provides a safe harbor for an issuer that has completed or permanently ceased all key managerial actions it stated or promised as part of the investment contract," said SEC Chairman Paul S. Atkins in a release.

The market barely reacted. XRP is hovering around $1 — almost no change over the past day. The token's market cap stands at $62.7 billion, ranking sixth overall. The XRP price remains far from its July 2025 record of $3.65.

The focus now shifts to the comment period and congressional review, where the CLARITY Act, a bill defining the digital asset market structure, awaits a Senate vote. The final terms of the "safe harbor" will be crucial for issuers that launched tokens outside the U.S.: they will determine whether sales return to the American market.

My take: this is undoubtedly an important step toward the market's institutional maturity, but don't expect an immediate effect. The proposal's real value will only become apparent after final refinements and approval. For XRP, this is more of a medium-term positive signal that could strengthen its legal status, but it is unlikely to trigger an immediate rally.