The future of U.S. crypto regulation may not be decided solely by Congress.

While lawmakers continue to debate comprehensive digital asset legislation, the Securities and Exchange Commission appears to be preparing for a different path: building a regulatory framework through agency rulemaking if legislative efforts stall.

The SEC’s anticipated “Reg Crypto” initiative remains under review at the Office of Information and Regulatory Affairs (OIRA). The proposed framework has not yet been released as a formal Notice of Proposed Rulemaking (NPRM), but the direction is becoming increasingly clear: the SEC is positioning itself to address many of the same issues Congress has been attempting to resolve through administrative action.

The message from SEC leadership is straightforward: if Congress does not establish the rules of the road, the agency may attempt to create them.

The Three-Part Regulatory Package

The anticipated SEC rulemaking agenda centers around three major areas:

1. Token Offerings and Innovation Pathways

A key component would address how digital assets can be offered and distributed while remaining within a securities law framework.

The proposed approach reportedly includes:

• A startup exemption allowing certain token projects to raise approximately $5 million;

• A broader fundraising exemption allowing up to $75 million in token offerings; and

• A decentralization safe harbor designed to provide additional flexibility for projects that evolve beyond traditional securities structures.

Such a framework would represent a significant shift from the SEC’s historically enforcement-driven approach toward a more defined pathway for compliant token innovation.

For founders and investors, clear exemptions could reduce uncertainty around early-stage fundraising. However, the details — including eligibility requirements, disclosure obligations, resale restrictions, and compliance requirements — will determine whether these pathways are practically usable.

2. Broker-Dealer Custody Rules

A second pillar focuses on custody requirements for digital assets.

Traditional financial market rules were not designed around blockchain-based assets, creating uncertainty for broker-dealers, custodians, and institutional participants. Updated custody rules could clarify:

• Who may custody digital assets;

• How customer assets must be safeguarded;

• What operational controls are required; and

• How existing securities regulations apply to blockchain-based assets.

Greater clarity could encourage institutional participation while establishing clearer expectations for market participants.

3. Trading Venue Market Structure

The third component addresses the structure of digital asset trading platforms.

Questions surrounding whether crypto trading platforms should register as exchanges, alternative trading systems, broker-dealers, or operate under new frameworks have remained unresolved.

A dedicated market structure rule could define:

• Registration pathways for trading platforms;

• Compliance obligations;

• Market integrity standards; and

• The relationship between securities markets and digital asset markets.

This area will likely have significant implications for exchanges, token issuers, and investors.

CLARITY Act or Administrative Action?

The broader question is whether Congress will enact comprehensive crypto legislation before the SEC completes its regulatory agenda.

The CLARITY Act represents one possible path toward establishing clearer jurisdictional boundaries between regulators and creating a statutory framework for digital assets. However, if legislative momentum slows, SEC Chair Paul Atkins has indicated a willingness to pursue administrative solutions.

The result could be a regulatory regime that mirrors many objectives of congressional proposals — but created through SEC rulemaking rather than legislation.

This approach would give the SEC significant influence over:

• How tokens are classified;

• What disclosures are required;

• Which entities may operate in the market; and

• How innovation is balanced against investor protection.

What This Means for Digital Asset Companies

For founders, investors, and technology companies building in the blockchain space, the regulatory landscape remains fluid.

Companies should prepare for a future where compliance requirements may become more structured, even if Congress does not pass comprehensive legislation.

Key considerations include:

• Evaluating whether token structures may trigger securities obligations;

• Designing fundraising strategies with potential SEC frameworks in mind;

• Reviewing custody and operational arrangements;

• Monitoring developments around trading platform regulation; and

• Building compliance processes before regulatory requirements become mandatory.

The next phase of crypto regulation may not come from a single congressional bill. Instead, it may emerge through a combination of SEC rulemaking, enforcement priorities, and evolving market standards.

The Bottom Line

SEC Reg Crypto remains parked at OIRA, but the regulatory direction is becoming clearer.

Whether through the CLARITY Act or SEC rulemaking, the United States appears to be moving toward a more defined digital asset framework. The unanswered question is not whether regulation will arrive — but who will write the rules.

For companies building the next generation of blockchain and digital asset infrastructure, preparation will be critical. The firms that understand and adapt to the emerging regulatory environment will be best positioned to lead.

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This blog post is for informational purposes only and is not legal advice. Please consult with a Launch Legal attorney regarding your specific situation.