{"id":12224,"date":"2026-08-22T14:09:13","date_gmt":"2026-08-22T14:09:13","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=12224"},"modified":"2026-08-22T14:09:13","modified_gmt":"2026-08-22T14:09:13","slug":"sec-proposes-a-path-for-crypto-projects-to-raise-75-million-and-later-end-the-tokens-securities-contract","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=12224","title":{"rendered":"SEC proposes a path for crypto projects to raise $75 million and later end the token\u2019s securities contract"},"content":{"rendered":"

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US regulators have already found a home for true Bitcoin perpetuals inside the CFTC\u2019s exchange framework. The SEC is now turning to another part of the same market: how a team can pay to build a network before its token has much use.<\/p>\n

A derivatives exchange starts with an established asset and places a new contract around it. A token project usually starts with a promise. Buyers provide the capital needed to write the code, launch the network, and make the token useful, while the founding team promises to do the work that could make their purchase more valuable. That bargain can be an investment contract under federal securities law.<\/p>\n

The SEC\u2019s proposed Regulation Crypto Assets tries to cover that bargain from start to finish. It would create routes for projects to raise up to $75 million under crypto-specific rules. It would also establish a filing process for ending the investment contract once the issuer has completed or permanently stopped the work it promised.<\/p>\n

The proposal entered the Federal Register on Aug. 21, and comments are due Oct. 20. The commission must review those submissions and vote on a final rule before any project can use the new exemptions.<\/p>\n

The SEC is regulating the bargain around the token<\/h2>\n

The proposal builds on the SEC\u2019s March interpretation of federal securities law. Under that approach, a \u201ccrypto asset\u201d can take part in a securities transaction without retaining the same legal status forever. The security is the \u201ccovered investment contract,\u201d meaning the transaction and promises that connect a buyer\u2019s money to the issuer\u2019s essential managerial work.<\/p>\n

Separating the token from the bargain<\/h3>\n

The distinction becomes much more important when the token and the bargain are separated. The token is the digital object recorded on-chain. The bargain is the buyer\u2019s decision to fund a team that has promised to build the software, secure the network, and create the conditions for the token\u2019s use. Securities law governs that financing relationship while buyers still depend on the team\u2019s promised work.<\/p>\n

Once those promises have been fulfilled, or the issuer has permanently stopped trying to fulfill them, the investment contract can cease to exist. Regulators could then treat later token transfers separately from the fundraising transaction. Rule 400 would turn that principle into a safe harbor with a public filing and a written explanation from the issuer.<\/p>\n

That safe harbor would be available to any qualifying issuer. A project could use it even if it raised money through Regulation D, another exemption, or a structure outside the two new fundraising paths. Regulation Crypto Assets therefore reaches beyond the offerings conducted under its own $5 million, $20 million, and $75 million limits.<\/p>\n

Three lanes for three stages<\/h2>\n

The proposal divides token financing into a small startup exemption and a larger fundraising exemption with two tiers. The dollar limits borrow from Regulation Crowdfunding and Regulation A, while the eligibility rules and disclosures are rewritten for crypto projects.<\/p>\n\n\n\n\n\n\n
Proposed path<\/th>\nMaximum raise<\/th>\nWho can use it<\/th>\nDisclosure and reporting<\/th>\nRetail access and resale<\/th>\n<\/tr>\n
Startup exemption<\/td>\n$5 million across one period lasting up to four years<\/td>\nAn individual, a group, or an entity; one use for the same token or another token with closely matching features<\/td>\nForm NOR, free public disclosures on the project\u2019s website, and yearly material updates; no financial statements<\/td>\nNo special retail purchase cap; general solicitation permitted; contracts carry no rule-based resale lockup<\/td>\n<\/tr>\n
Fundraising Tier 1<\/td>\n$20 million in 12 months<\/td>\nA US entity that meets the proposal\u2019s domestic control and operations tests<\/td>\nSEC-qualified Form 1-CRYPTO, financial statements that may be unaudited, plus annual, semiannual, and current reports<\/td>\nA non-accredited buyer is capped at 10% of annual income or net worth, whichever is greater; contracts carry no rule-based resale lockup<\/td>\n<\/tr>\n
Fundraising Tier 2<\/td>\n$75 million in 12 months<\/td>\nA US entity that meets the proposal\u2019s domestic control and operations tests<\/td>\nSEC-qualified Form 1-CRYPTO, audited financial statements, plus annual, semiannual, and current reports<\/td>\nThe same 10% cap applies to non-accredited buyers; contracts carry no rule-based resale lockup<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The startup exemption<\/h3>\n

The startup lane is closest to a regulated version of an early white-paper sale. A project could be run by a person or an informal group that hasn\u2019t formed a company. It would file a notice of reliance on Form NOR and publish the required information free of charge on its website by the time of that filing. Any material updates would have to appear within 30 calendar days of each year-end.<\/p>\n