The U.S. Securities and Exchange Commission (SEC) is preparing to take a major step toward formal crypto regulation. The Senate failed to advance the CLARITY Act before its August recess. As a result, the SEC will hold an open meeting on Friday to consider whether to propose a tailored framework for certain crypto investment contracts.
SEC Begins Formal Rulemaking Process
According to SEC officials, the August 14 meeting will consider whether to release the proposed rules for public comment. The framework is often referred to as “Regulation Crypto.” It is expected to create a more structured route for certain digital asset projects to legally raise capital. Moreover, it would do so without automatically triggering full SEC registration requirements.
The proposal could also establish a clearer path for projects to move outside SEC jurisdiction once they are no longer under active management.
It could also create exemptions or safe harbors for certain crypto offerings, giving eligible projects a clearer route to raise capital without going through the full securities registration process. Additionally, it could build on the SEC and CFTC’s March interpretation, which established categories for different types of crypto assets. The interpretation also explained when an asset can separate from an investment contract.
This Is Only The First Step
One crypto user stressed that Friday’s meeting does not mean the rules will immediately take effect. If the proposal is approved, it would enter the traditional notice-and-comment process. This process would be followed by economic analysis, public feedback, possible revisions, and a separate final vote.
Crucial SEC rulemakings have historically taken around 12 to 18 months. However, interim measures or temporary relief could potentially move faster.
White house crypto official Patrick Witt, however, said the administration remains “fully committed” to passing the legislation next month.
TD Cowen analyst Jaret Seiberg described the SEC proposal as the first of several rulemakings expected to provide greater certainty for crypto markets following the Senate delay.
What Comes Next For Crypto Regulation?
SEC Chairman Paul Atkins has repeatedly said formal rules are needed because earlier crypto policy statements do not provide the same long-term certainty. A finalized rule would be harder to reverse than informal guidance.
The SEC is also working with the CFTC on a crypto asset taxonomy and developing its approach to tokenized securities. Meanwhile, the CFTC’s Innovation Advisory Committee will hold its first meeting on August 20. Notably, the committee includes major companies from crypto and traditional finance, including Coinbase, Ripple, Robinhood, Kraken, Gemini, Polymarket, Kalshi, CME and Nasdaq.
For now, the SEC initiative and CLARITY Act are moving on separate tracks. Congress could still provide a broader statutory framework, while the SEC is preparing to fill regulatory gaps through formal rulemaking.
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