America's biggest crypto rule in years just hit a key deadline. On October 20, the US Securities and Exchange Commission (SEC) closed the public comment period on its proposed "Regulation Crypto Assets" — a plan that would create brand-new rules for how crypto projects raise money from investors.
The proposal, put forward in August, runs to 146 pages and asks the public 149 questions. That scale shows just how many open questions the regulator still has before it writes a final rule.
What the SEC wants to do
Right now, crypto fundraising sits in a legal gray area. When a new project sells tokens to raise money, the SEC often treats that sale as an investment contract — the same legal category as a stock offering. That brings heavy paperwork and strict rules.
The new proposal tries to draw a cleaner line. It would create two special exemptions: one for small startup token sales of up to $5 million over four years, and a larger one allowing raises of up to $75 million in a year.
It also offers a "safe harbor." That is a legal promise: once a project finishes the work it promised investors, or gives it up for good, its token would no longer count as an investment contract. This matters because today, a token can stay stuck in the "securities" category long after the project has moved on.
Industry asks for changes
The industry did not stay quiet. On October 19 — one day before the deadline — the Hyperliquid Policy Center, the policy arm of the crypto exchange Hyperliquid, filed a comment letter asking the SEC to fix five things.
Airdrops. The group wants the rule to state clearly that free token giveaways are not investments, since users pay nothing to receive them. It says simple claiming steps, like connecting a wallet or passing a sanctions check, should not count as payment.
Secondary trading. The letter asks the SEC to explain how decentralized protocols and unregistered middlemen can take part in trading these tokens after the first sale — an area the proposal leaves unclear.
Token buybacks. Hyperliquid's center wants a clear difference between buybacks run by automatic, published rules and buybacks decided by a single company. The first kind, it argues, should not be treated as the project propping up its own price.
Federal preemption. The group wants protections earned under the safe harbor to override state registration rules, so projects do not face a patchwork of state-by-state requirements.
The letter supports the overall proposal but says these fixes are needed to stop developers and token holders from facing legal uncertainty.
A second regulator is moving too
The SEC is not the only US agency in motion. On October 5, the Commodity Futures Trading Commission (CFTC) asked for public comment on its own framework for retail crypto trading. If adopted, it would spell out which retail crypto transactions fall under commodity law and tailor exchange and clearing rules to fit them.
Europe is busy as well. On October 20, Germany's stock exchange operator Börse Stuttgart won a license to run a regulated trading and settlement system for tokenized securities. The harder part, analysts say, is getting enough players to trade there for it to matter.
What happens next
With the comment period now closed, the SEC will read the responses and decide on a final rule. It has set no date for that decision. For crypto projects, the proposal could make fundraising simpler — but until the final text lands, the details that matter most are still up for debate.
