SEC Proposes Tailored Crypto Token Fundraising Rules

Regulation Crypto Assets would create a tailored federal securities-law regime for certain investment contracts involving digital assets, giving issuers a defined route to raise capital without full registration. The proposal builds on the Securities and Exchange Commission’s March 2026 interpretation of how securities laws apply to crypto transactions. It is significant because Congress has yet to complete the CLARITY Act, leaving regulators and market participants without a durable statutory framework for oversight.

The SEC proposed the rules on Aug. 18, 2026. A one-time startup exemption would permit up to $5 million of offerings over four years, while a second exemption would allow $20 million under Tier 1 or $75 million under Tier 2 in any 12-month period. The package also includes a conditional safe harbor for when a crypto asset is no longer subject to an investment contract. Comments are due 60 days after the proposal is published in the Federal Register.

The U.S. Securities and Exchange Commission has long applied securities laws to crypto-asset issuance and fundraising, leaving development teams uncertain about whether tokens qualify as securities and must be registered. The proposed “Regulation Crypto” would provide a temporary registration exemption, reducing compliance costs for startups and signaling a shift in the SEC's regulatory approach toward supporting industry growth.

The SEC is expected to propose its first major crypto rule as soon as July 2026, with a safe harbor for crypto developers, startups and fundraising activities at its core. The proposal would ease registration requirements and barriers to raising capital. The duration of the exemption, eligibility conditions and fundraising cap have not been disclosed. The measure would still be subject to public consultation and a formal rulemaking process.

The U.S. Securities and Exchange Commission is reviewing its approval framework for novel exchange-traded funds, including nontraditional products involving cryptocurrencies, tokenized assets and event contracts. The review centers on whether such funds should qualify for an automatic approval mechanism, with implications for issuers’ listing timelines, compliance costs and investor-protection standards.

The SEC has opened a 60-day public comment period on proposed changes to U.S. rules governing novel ETFs, seeking market participants’ views on an automatic approval system and the conditions under which it should apply. The process does not mean new products will be approved immediately, but it could change the review threshold for ETFs involving cryptocurrencies and other assets. No monetary amounts or date for a final decision have been disclosed.

The US Securities and Exchange Commission has long applied securities laws to crypto token offerings, while the industry has criticized the lack of clarity over when a token constitutes an investment contract and when it can fall outside regulatory oversight. Chair Paul Atkins has therefore proposed “Regulation Crypto Assets,” combining exemptions for startups and fundraising with an investment-contract safe harbor to balance capital formation, disclosure and investor protection.

On March 17, 2026, Atkins proposed allowing startups to raise up to $5 million over a maximum of four years, with a separate exemption permitting offerings of up to $75 million in any 12-month period. The draft was submitted to the White House Office of Information and Regulatory Affairs for review in early April. On May 18, media reports said the SEC could introduce a separate “innovation exemption” as early as that week, allowing tokenized US equities to operate without full broker-dealer or exchange licenses under specified conditions.