The public comment period on Regulation Crypto Assets, the SEC's first crypto-specific offering regime, closed on October 20. The Block counted more than 100 letters by mid-afternoon, and Crypto Briefing put the final tally near 140. Ripple, Hyperliquid Policy Center, Nasdaq and AIMA asked the agency to adopt the rule with changes. Public Citizen asked it to withdraw the proposal.
The SEC issued the proposal on August 18, four days after it canceled the open meeting that was meant to vote on it. Publication in the Federal Register followed on August 21 under file number S7-2026-27, which started a 60-day clock. On October 21 the first page of the SEC's comment file listed 30 letters dated October 19 and 20 alone.
Open meeting pulled a day early, citing scheduling.
Release 33-11434, 401 pages, file S7-2026-27.
60-day comment clock starts.
More than 100 letters, about 140 by one count.
Two commissioners listed: Atkins and Uyeda.
What the rule would do
Four parts make up the proposal. A startup exemption lets an issuer raise up to $5 million over four years with narrative disclosures on its website. It requires two public filings, a notice of reliance at the start and a transition report on Form TR at the end. A fundraising exemption, modeled on Regulation A, allows up to $20 million a year in Tier 1 or $75 million in Tier 2, with audited financial statements and ongoing reports at the higher tier.
Rule 400 is the investment contract safe harbor. An issuer qualifies once it has completed, or permanently ceased, every essential managerial effort it promised investors, makes no new promises of that kind, and files a Form TR certifying the fact with a supporting analysis. Its token is then deemed no longer subject to an investment contract. Rule 500, the fourth part, preempts state registration rules for these offerings and for secondary trades by anyone other than an issuer, underwriter or dealer.
Antifraud law applies throughout. For its paperwork estimate the SEC assumed about 130 offerings a year under the regulation, a figure it describes as uncertain.
What the filers asked for
The letters we read split on one line: whether a token's status should turn on a filing or on the law. Ripple's 20-page letter, signed by its chief legal officer Stuart Alderoty and two colleagues, supports adoption and asks for a "no presumption" clause in Rule 400. Not filing a Form TR, it argues, must create no inference that a token is a security. The letter also recalls what the alternative cost: "Securing that clarity cost Ripple more than $150 million in legal fees."
| Filer | Position | Main requests |
|---|---|---|
| Ripple (Oct 20, 20 pp.) | Adopt | No-presumption clause in Rule 400; extend the safe harbor to the Investment Company and Advisers Acts; let intermediaries rely on a filed Form TR; narrow the dealer exclusion in Rule 500(b) |
| Hyperliquid Policy Center (Oct 19, 12 pp.) | Adopt | Write the airdrop analysis into rule text; protect projects while managerial work is still under way; split programmatic from discretionary buybacks; make preemption permanent |
| Nasdaq (Oct 20, 7 pp.) | Adopt with care | A cross-walk of each new term to existing law; keep equity, debt and ETF shares out of "covered investment contract"; index all offering thresholds to inflation |
| AIMA (Oct 20, 8 pp.) | Adopt | Carry a Rule 400 determination across the Advisers and Investment Company Acts; make Form TR map each original promise to what was finished; cure periods for filing defects |
| Public Citizen (Oct 20, 4 pp.) | Withdraw | Resume enforcement instead; the letter calls crypto "inherently a Ponzi scheme" |
Hyperliquid Policy Center, whose parent runs a perpetuals exchange that buys back its own token from fees, wants two things the rule does not yet say. One is that a free token distribution is not an investment of money unless the recipient hands over "definable, tangible consideration". The other is that automated buybacks running on published rules differ from discretionary ones steered by a central party. Both matter for the HYPE program we track.
Nasdaq's letter, signed by its chief legal officer John Zecca, backs the Form TR design as a sensible balance. It warns that a tokenized instrument economically equivalent to a registered security should trade only with the issuer's consent on venues meeting the same surveillance rules. AIMA's version is narrower and more technical. It wants a Form TR that lists each promise an issuer made and shows what happened to it, with the certification carrying real accountability.
Public Citizen's four pages take the opposite view. The group, writing for more than a million members, asks the SEC to withdraw the rule and return to enforcement. Bitwise filed on October 19 and asked for token classification standards an outsider can apply from public information, Bloomingbit reported, and SIFMA asked for changes to how issuers opt in.
What to watch
The next step is the SEC's, and it has no deadline. Staff read the file, the agency answers the substantive points in an adopting release, and the commissioners vote. The SEC's commissioners page, updated October 3, lists two of them, Chairman Paul Atkins and Mark Uyeda, after Hester Peirce's departure was announced on October 1. A two-member commission can adopt rules, but any dissent would block them.
Three things are checkable. First, whether letters dated after October 20 appear in the file, which would confirm the late-comment practice Crypto Briefing described. Second, whether the final text keeps the Form TR structure that Ripple, Nasdaq and AIMA each endorsed in different words. Third, whether airdrops and buybacks enter the rule at all. Neither word appears in the fact sheet, and both decide how the next generation of token launches is structured.
For readers of our airdrop pages, nothing changes today. The March interpretation on free distributions stands, and no claim window we track depends on this rule. Our airdrop primer explains how the consideration question affects eligibility design.
