The U.S. Securities and Exchange Commission (SEC) this week introduced the long-awaited draft regulation "Regulation Crypto Assets." In my assessment, this initiative is one of the regulator's most significant attempts to create a formalized and predictable framework for tokens that were initially sold as investment contracts but subsequently took on the characteristics of decentralized networks.

The key question that has plagued the market for years and became the central theme in the famous lawsuit against Ripple is finally receiving a written answer. It concerns how a project can legally "exit" from under the jurisdiction of securities law without waiting through years of litigation.

What the new SEC draft proposes

The developed framework provides two clear paths for issuers seeking to raise capital without full registration under traditional rules:

  • Streamlined option — allows raising up to $5 million in aggregate over four years, with minimal reporting requirements.
  • Expanded option — opens access to raising up to $75 million within any 12-month period, but imposes stricter disclosure obligations and publication of financial statements.

It is important to note that both paths require issuers to provide investors with simple and clear descriptions of the project's essence. The federal status of this rule automatically eliminates the need to comply with conflicting state requirements for primary offerings and certain secondary trades, removing one of the main barriers for businesses.

In its architecture, this initiative resembles the era of initial coin offerings (ICOs), which ended in 2018-2019 following aggressive regulatory actions. However, we now see an important difference: instead of a complete ban, the SEC offers structured frameworks with predefined limits and transparency requirements. This is a deliberate shift from a policy of "regulation through enforcement" toward creating a functional regulatory environment.

The legacy of the Ripple case and the new "safe harbor"

Let me remind you that the SEC's lawsuit against Ripple in 2020 led to the historic ruling by Judge Analisa Torres in 2023: the XRP token itself is not a security, but institutional sales were found to violate the law. The case ultimately concluded in August 2025, but left behind a conceptual void: there was no clear algorithm for an asset to exit from under securities law without court involvement.

The new SEC draft is precisely that missing mechanism. According to the proposal, if a project team completes or permanently ceases the management activities it declared for token holders, the asset ceases to fall under the definition of an investment contract. This creates a formal "safe harbor" for issuers that have decentralized their networks.

"In accordance with the commission's prior clarifications, the current proposal also provides a safe harbor for an issuer that has completed or permanently ceased all key management actions it declared or promised under the investment contract," emphasized in the official statement by SEC Chairman Paul S. Atkins.

The market reaction to the news was restrained: XRP continues to trade near the $1 mark, showing minimal volatility over the past day. The token's market capitalization stands at approximately $62.7 billion, keeping it in sixth place in the overall ranking. The price remains far from the all-time high of $3.65 recorded in July 2025.

Currently, the market's main attention is focused on the 60-day public comment period and subsequent consideration in Congress, where the CLARITY Act, which defines the market structure for digital assets, is simultaneously awaiting a Senate vote. The final terms of the "safe harbor" will be a decisive factor for issuers that issued tokens outside the U.S. and are now evaluating the possibility of returning to the American market.

My analysis: This SEC step is long-awaited but only the first stage. The proposed framework certainly reduces legal uncertainty, but the initiative's success will depend on how flexible the final "decentralization" criteria turn out to be and how they align with parallel legislative initiatives. For investors, this is a positive signal, but not a reason for euphoria — implementation will take many more months.