The Next Era of Crypto: Two SEC Pathways, One Onchain Capital Market

Reg Crypto could help useful blockchain networks raise capital. The Innovation Exemption brings eligible public stocks onchain.

For years, the crypto industry has asked two basic questions. How can a team raise money to build a useful blockchain network without leaving investors unprotected? And how can existing securities move onchain without abandoning the rules that govern public markets?

The U.S. Securities and Exchange Commission is now addressing those questions through two separate initiatives. Its proposed Regulation Crypto Assets, commonly called Reg Crypto, focuses on the development and financing of crypto networks and applications. Its Innovation Exemption creates a temporary, conditional pathway for certain tokenized U.S. public stocks to trade through Tokenized Securities Venues, or TSVs.

The initiatives cover different assets and follow different rules. Together, however, they point toward a broader idea: blockchain can become working capital-market infrastructure rather than simply a place to issue and trade speculative tokens.

Why the distinction matters

Reg Crypto concerns new crypto projects. A development team may need capital and time to build software, attract users and make a network functional. During that period, the promises made by the team may create an investment contract even when the crypto asset itself is not a security.

The Innovation Exemption addresses an entirely different market. It concerns shares that already trade in the National Market System, the U.S. public-market framework that includes exchanges such as NYSE and Nasdaq. A tokenized NMS stock remains tied to an existing public company and its underlying shares.

Pathway one helps useful crypto projects get built

The central insight behind proposed Reg Crypto is simple. A crypto project often has to begin with a small group of people. They write the code, raise money, test the product and persuade others to use it. Those efforts may be essential to the project’s success. That creates a difficult transition: the team may be selling an investment contract while it is still building a crypto asset that could later operate without that contract.

Reg Crypto proposes a tailored framework for this development period. It includes a Startup Exemption with a proposed $5 million limit over a four-year period, larger fundraising tiers of up to $20 million and $75 million, and a proposed safe harbor that addresses when a crypto asset would no longer be subject to an investment contract. Each route has its own eligibility, disclosure, filing and investor-protection conditions.

This could support projects that use crypto assets for a real function. Examples could include networks that pay independent providers for computing power, applications that reward participants for contributing verified data, payment networks that lower the cost of cross-border transfers, or systems that coordinate access to physical infrastructure. The important question is not whether a project has a token. It is whether the network solves a problem and whether the disclosures explain how the project, financing and crypto asset work.

Foreign founders may have a route into the U.S. market

The proposed Startup Exemption is especially relevant internationally. Its issuer may be an entity, an individual, or a group of individuals or entities. Unlike the proposed larger Fundraising Exemption, it does not expressly require the issuer to be organized in the United States.

That means a qualifying foreign founder or development team may be able to use the Startup Exemption, subject to all of its conditions. Those conditions include the $5 million aggregate offering limit, a notice filing, public disclosures, annual updates when material information changes, disqualification rules and a transition report. The proposal is not a passport for every foreign project, and it has not yet become a final rule. It does, however, recognize that useful blockchain projects and their development teams are global.

Pathway two brings existing public stocks onchain

The Innovation Exemption starts from the opposite direction. The company, the stock and the public-market disclosure system already exist. The goal is to let eligible tokenized National Market System (NMS) stocks trade onchain through permissioned automated market makers and liquidity pools.

In plain English, a TSV is a regulated-access venue where approved participants can buy and sell eligible tokenized versions of public stocks. The tokenized stock must represent the economic and governance rights of the underlying stock, including dividends and voting rights. Synthetic exposure is not enough. Issuers must also have an opportunity to object to their stock being traded on a TSV.

The SEC’s order gives qualifying TSVs temporary, conditional relief from the Exchange Act definition of an exchange. The venue must be a U.S. person, restrict access to permitted participants, meet the order’s operating and reporting conditions, and comply with applicable sanctions rules. Federal antifraud and antimanipulation provisions continue to apply.

Global liquidity can participate under defined conditions

The order also provides temporary, conditional relief from the Exchange Act definition of dealer for certain liquidity providers called Covered Firms. This matters because an automated market needs firms willing to supply shares and cash, quote prices and absorb buying and selling demand.

An eligible foreign liquidity provider that qualifies as a Covered Firm may therefore participate in the activity covered by the order without registering as a U.S. dealer solely because of that covered activity. This is not a blanket exemption. The firm must satisfy the order’s conditions, and any activity outside the exemption requires a separate legal and regulatory analysis. Antifraud, antimanipulation, sanctions and other applicable requirements remain in force.

That distinction is important. The SEC is not removing regulation from tokenized stock trading. It is defining a controlled environment in which new market structures and a broader set of liquidity providers can be tested.

The role of crypto exchanges will change

Crypto exchanges built global customer relationships, wallet infrastructure and markets that operate around the clock. Their next role may extend beyond listing crypto assets.

Under Reg Crypto, an exchange could help identify credible development teams, support compliant distributions, provide technical connectivity and contribute liquidity after an asset becomes eligible to trade. Under the Innovation Exemption, a foreign exchange or affiliated market participant could explore becoming an approved distribution or liquidity partner, subject to the order and other applicable laws.

This does not require an exchange to hand its customer list to another platform. Partnerships can preserve the exchange’s customer relationship while allocating regulated securities functions to authorized entities. The commercial model could involve technology integration, issuer collaboration, permitted referrals, market making or other infrastructure services. The exact structure will depend on the jurisdiction and the regulated activity involved.

One onchain capital market does not mean one set of rules

The two SEC pathways may eventually meet within a common onchain experience, but the underlying assets remain different. A crypto asset connected with an investment contract is not the same as a tokenized share of a public company. An issuer-sponsored blockchain-native security is also different from a token representing an existing NMS stock.

A credible platform must preserve those distinctions. It must know who owns each asset, who holds customer cash, who controls the private keys, how trades settle, how corporate actions reach investors and which regulator governs each function. Blockchain can improve records and settlement, but it does not eliminate these responsibilities.

Where Ohanae fits

NYSE. Nasdaq. Now, Ohanae.

One regulated infrastructure. Two complementary securities markets.

Ohanae is building a regulated home for securities on blockchain. Its core market is for issuer-sponsored, blockchain-native securities outside the National Market System. Through one integrated platform, eligible investors can hold and trade these securities, while issuers can record ownership and raise capital.

In parallel, Ohanae Securities is developing a Tokenized Securities Venue for eligible tokenized NMS stocks under the Innovation Exemption. The planned TSV would use a permissioned, multi-dealer liquidity model supported by carrying, custody, clearing and settlement capabilities.

Ohanae’s carrying, self-clearing broker-dealer model is central to this approach. Customer cash remains within the applicable broker-dealer customer-protection framework, while Ohanae Securities maintains exclusive control of the private keys securing customers’ crypto asset securities. Ohanae, Inc. is also an SEC-registered transfer agent and may serve in that capacity where properly appointed.

The aim is straightforward: customers complete regulated onboarding once, then access two different securities markets through a common infrastructure. One market supports blockchain-native capital formation and trading outside the NMS. The other would support eligible tokenized public stocks within the NMS framework.

The next era will be measured by usefulness

Crypto’s first era proved that crypto assets can move globally on shared networks. Its next era must prove that those networks can finance useful products, protect investors and connect responsibly with regulated markets.

Proposed Reg Crypto could give entrepreneurs a clearer way to finance and develop functional crypto networks. The Innovation Exemption gives market operators a controlled way to test onchain trading in eligible public stocks. Foreign founders and liquidity providers may participate where the applicable conditions permit, giving both initiatives an international dimension.

If these frameworks succeed, crypto exchanges will become more than token-listing venues. Broker-dealers, transfer agents, custodians, developers, issuers and liquidity providers will work together across the asset lifecycle. The industry will move closer to an institutional onchain-finance market built around useful assets, clear responsibilities and enforceable investor protections.

Confidence. That’s Ohanae.

Official sources

SEC Proposed Regulation Crypto Assets — Release Nos. 33-11434 and 34-106150, August 18, 2026.

SEC Innovation Exemption press release — September 17, 2026.

SEC Chairman statement on the Innovation Exemption — September 17, 2026.

Disclosure

This article is for general information and discussion only. It is not legal, investment, tax or accounting advice; an offer to sell securities; or a solicitation of an offer to buy securities. Regulation Crypto Assets is a proposed SEC rule and may change before adoption or may not be adopted. The Innovation Exemption provides temporary, conditional relief, and eligibility depends on the terms of the SEC order and other applicable law. Ohanae’s proposed TSV remains subject to legal, regulatory, technical and operational readiness, including engagement with the SEC and FINRA where required. References to potential products, services, market structures or launch plans are forward-looking and do not guarantee availability or regulatory approval. Market participants should consult qualified advisers regarding their circumstances.