SEC Proposes New Framework for Crypto Asset Investment Contracts; Treasury Issues NPRM Implementing Section 3 of the GENIUS Act; and more.

SEC Proposes New Framework for Crypto Asset Investment Contracts

On August 18, 2026, the SEC proposed Regulation Crypto Assets, a new framework tailored to investment contracts involving crypto assets. The proposed rule would create two new pathways for crypto projects to raise capital without registering under the Securities Act. 

For DeFi, the most consequential section of the proposed rule is Rule 400: the Investment Contract Safe Harbor. Rule 400 would provide projects a clearer pathway for determining when a crypto asset is no longer part of the investment contract in which it was originally offered or sold. 

Treasury Issues NPRM Implementing Section 3 of the GENIUS Act

On August 17, 2026, Treasury issued a Notice of Proposed Rulemaking implementing Section 3 of the GENIUS Act, which governs the issuance, offer, and sale of payment stablecoins in the United States. Beginning July 18, 2028, digital asset service providers will generally be prohibited from offering or selling payment stablecoins to U.S. persons unless they are issued by a permitted U.S. issuer or are a qualified foreign issuer that satisfies applicable U.S. requirements, which includes having the technical capacity and intent to comply with U.S. law.

Importantly for DeFi, the GENIUS Act excludes certain technology including self-custodial software, validators, and liquidity-pool activity from the definition of “digital asset service provider,” leaving significant categories of non-intermediated activity outside of these restrictions. Comments on Treasury’s proposed rule are due on October 19, 2026.

You can read the NPRM here. 

Trump Pushes the Clarity Act at White House Crypto Summit

On August 19, 2026, President Trump hosted crypto executives, traditional finance leaders, and federal regulators at the White House ahead of the CFTC’s Innovation Advisory Committee meeting. Trump said called on Congress to pass “a fair version of the Clarity Act,” which he framed as the next major step for U.S. crypto policy.

SEC Chairman Paul Atkins echoed this message, calling the passage of the Clarity Act the “most important priority,” and highlighting the SEC’s newly proposed Regulation Crypto Assets. CFTC Chairman Michael Selig said his agency would “use every tool available” to advance regulatory clarity while Congress works on legislation.

You can watch the full meeting here.

CFTC Innovation Advisory Committee Discusses Crypto, AI, and Prediction Markets

On August 20, 2026, the CFTC’s Innovation Advisory Committee held its inaugural meeting which included sessions on crypto assets, artificial intelligence, and prediction markets. The crypto discussion centered on how overlapping federal jurisdiction, state-by-state licensing, shifting legal interpretations, and ‘regulation by enforcement’ have increased legal and compliance costs, limited product availability across states, discouraged startups and investment, and pushed hiring and trading activity offshore.

Professor Carla Reyes of SMU Law highlighted the need for clear rules governing developers of financial protocols, pointing to the CFTC’s prior enforcement actions as creating uncertainty for developers seeking to build products within the agency’s jurisdiction. She also pointed to the Blockchain Regulatory Certainty Act (BRCA) as an important step toward providing protections for developers. More broadly, participants called for clear federal rules through the Clarity Act, as well as proactive agency rulemaking regarding the treatment of perpetual futures, tokenized collateral, and 24/7 markets.

The AI session of the meeting focused on agentic finance and autonomous systems, with discussion of cybersecurity, accountability, formal verification of financial software, stablecoins as potential payment rails for AI agents, and new derivatives and price-discovery markets. 

The final session on prediction markets examined the growing federal-state jurisdictional conflict over event contracts and their potential value for hedging and price discovery, while also raising questions about manipulable contracts, retail protections, consistent KYC requirements, and the boundary between CFTC-regulated event contracts and securities.

You can watch the full meeting here and read Chairman Selig’s remarks here. 

DEF Responds to FinCEN GENIUS Act CIP NPRM

On August 21, 2026,  DEF and Solana Policy Institute (SPI) submitted a comment letter responding to FinCEN and the federal banking agencies’ joint proposed rule implementing customer identification requirements for permitted payment stablecoin issuers (PPSIs) under the GENIUS Act. 

DEF and SPI generally support FinCEN’s focus on direct relationships between stablecoin issuers and their customers, but urge the agencies to ensure the final rule does not expand those obligations to secondary-market activity or decentralized infrastructure. 

You can read our blog post on the submission here.

Notable and Quotable

“This is common-sense regulation: minimum effective dose, maximum freedom to build, and durable clarity under existing law. […] We are charting a road to bring innovators back to the United States.”

— Chairman Paul Atkins, in a statement on the SEC’s proposed Regulation Crypto Assets

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