Rules 300–307 — the Regulation A that Regulation A could not be

Regulation A cannot host this exemption. Eligible securities under Rule 261(c) are equity, debt and convertibles — not covered investment contracts. The Commission therefore wrote a Reg A-shaped exemption under section 28 and then changed the parts of Reg A that would have made a CIC offering unworkable: it applied investment limits to both tiers, applied ongoing reporting to both tiers, applied NSMIA preemption to both tiers, banned ATMs, and dropped dividend-reinvestment mechanics that a non-dividend crypto asset cannot use.

The dollar architecture

• Tier 1: $20 million in 12 months, of which selling securityholders who are affiliates may take up to $6 million.
• Tier 2: $75 million in 12 months, of which affiliates may take up to $22.5 million.
• First-year secondary-sale cap: selling securityholders as a group may not sell more than 30% of the aggregate offering price in the first offering, or in subsequent offerings qualified within one year of the first qualification. The cap is an anti-exit-via-the-exemption device.
• Issuer and affiliates are aggregated. Prior RCA sales in the lookback count.

Who may use it

U.S. issuers only, on a four-part test: organized in the United States; a majority of executive officers or of directors are U.S. citizens or residents; more than 50% of assets in the United States; business administered principally in the United States. Ineligible: blank-check companies and SPACs, investment companies and BDCs, and issuers subject to a section 12(j) order within five years (with a carve-out for orders that were entered before they became effective). The issuer must be current on Rule 305 reports, or on Exchange Act 13/15(d) reports, for two years. Subpart A, including Rule 104, applies.

The offering process

No offer until Form 1-CRYPTO is filed, except Rule 304 testing-the-waters. After filing and before qualification: oral offers, Rule 303 written offers, and Rule 304 TTW. After qualification, written offers must be accompanied by the most recent offering circular. No sale until qualified. If the issuer is not already a Rule 305(b) reporter, a preliminary circular must be delivered at least 48 hours before sale to anyone who indicated interest. Qualification is 20 calendar days after filing, like Form 1-A (Rule 301). Confidential treatment via 230.406 / 200.83.

Investment limits — both tiers, no listed-company carve-out

Unlike Regulation A, investment limits apply to Tier 1 and Tier 2. A non-accredited purchaser may not invest more than 10% of the greater of annual income or net worth (entities: greater of revenue or net assets). The issuer may rely on the purchaser’s representation unless it knows the representation is untrue. There is no exchange-listed carve-out. That is a deliberate tightening: CIC secondary markets are expected to exist, and the Commission did not want a listed-company-style retail dump on day one of a $75 million raise.

Continuous and delayed offerings — with a hard ATM ban

Rule 300(c) permits continuous or delayed offerings for selling securityholders, employee benefit plans (no DRIP, because CIC/crypto exclude dividend-bearing assets), options/warrants/rights, conversion, pledged collateral, and continuous offerings that commence within two business days, are expected to be sold within two years, and remain current on annual and semiannual reports — both tiers. At-the-market and variable pricing are prohibited (300(c)(3)(ii)). The Commission is not willing to let a CIC issuer drip tokens into a spot book the way an ATM equity issuer drips shares.

Financials

Tier 1: no financial-statement assurance. Tier 2: audited U.S. GAAP, audited under U.S. GAAS or PCAOB standards, auditor independent under Regulation S-X 2-01. Item 13 is a financial-condition narrative modeled on Regulation Crowdfunding 227.201(s), not a full Item 303 MD&A. Special financial reports if the offering statement is missing the most recent fiscal year or first-half interim. Access-equals-delivery of the final circular via EDGAR plus notice, within two business days.

• PRA: 31 fundraising offerings a year, taken from 2024 Reg D / A / CF crypto offerings above $5 million and up to $75 million. 1,510.412 hours per issuer. $29.73 million annual cost at $635/hour.
• Alternatives (pp. 272–274): ongoing reporting only on Tier 2 (the Reg A design); $50 million Tier 2 cap; $150 million Tier 2 cap.
• Why both tiers report: the Commission does not expect Tier 1 CIC offerings to be local, does expect secondary markets, and is preempting state review on both tiers. Those three facts are the justification. They are also the comment.
• CrowdCheck and TDC flagged that Reg A eligible-securities language excludes CICs. That comment is why this exemption exists as a new part 228 rather than an amendment to 230.251–263.

• U.S.-issuer test: a Cayman foundation + Delaware labs + U.S. developers will fail “organized in the U.S.” if the issuer is the foundation. The industry-standard stack is offshore. Either re-paper the issuer as a Delaware entity or ask the Commission for a “principal place of business / U.S. directed selling” test instead of an organic-statute test.
• Investment limits on Tier 1 will kill community rounds that Reg A Tier 1 currently permits without a cap. If that is your product, this is the letter. Bring the size distribution of your last raise.
• The ATM ban is the market-structure comment. If you need a liquidity-bootstrapping auction or a bonding curve, you are in 300(c)(3)(ii) territory. Propose a defined “algorithmic primary” exception with a 103(b)(2) pricing-method disclosure, or accept that primary distribution is a fixed-price circular.
• Affiliate 30% first-year cap: market-makers sitting in the selling group will chew this. Ask for a bona-fide market-maker exception or the cap becomes an allocation problem, not an investor-protection problem.
• Tier 2 audit: U.S. GAAP + S-X 2-01 independence is a real cost for a pre-revenue protocol. If you wanted a review-level assurance or IFRS, RFC the financials subsection and attach an engagement letter.