SEC’s Atkins Submits Long-Awaited Crypto Innovation Exemption To White House

by | Mar 23, 2026 | General

The SEC on Friday submitted two proposed crypto regulation rules to the White House for review.

The Innovation Exemption

Bloomberg on Monday reported that SEC Chairman Paul Atkins previewed the digital asset proposal at the Digital Chamber’s 2026 Blockchain Summit last week:

  • A sweeping digital asset proposal including an “innovation exemption” for crypto firms.
  • A hedge fund disclosure overhaul targeting Form PF reporting requirements.

The measures would allow crypto companies to temporarily avoid registration as brokers, exchanges, or other regulated entities for a limited period, giving them room to develop products without full securities compliance.

The proposal builds on the March 17 SEC-CFTC joint interpretation that classified crypto assets into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. 

Only digital securities—tokenized versions of traditional financial instruments—remain fully subject to securities laws.

The rulemaking framework, dubbed “Regulation Crypto Assets,” includes a startup exemption giving early-stage crypto projects up to four years to raise limited capital while working toward network maturity. 

It also provides an investment contract safe harbor with clearer rules about when a crypto asset ceases to be subject to securities laws.

The proposal is expected to run over 400 pages when formally released.

The Form PF Rollback

The second rule could bring major changes to Form PF, the confidential reporting tool that hedge funds, private equity firms, and other private fund advisers use to disclose performance and risk metrics to regulators.

The SEC postponed hedge fund disclosure requirements by a year last September, pushing the compliance deadline to October 1, 2026. 

Atkins questioned whether the government’s use of the data justified what he described as substantial burdens on investment managers.

Regulators originally adopted the Form PF amendments in 2024 after the spectacular collapse of Archegos Capital Management in March 2021, which caused billions of dollars in losses.

The new proposed rule could formally scale back those requirements before the October deadline.

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