SEC proposes $75M crypto raise exemption years after the ICO boom died

The Crypto token sale rule arrives years after the initial coin offering boom transformed crypto fundraising—and after developers, investors and speculators largely moved toward faster, more flexible ways of launching digital assets.

The U.S. Securities and Exchange Commission has finally proposed a framework that could allow eligible crypto projects to raise as much as $75 million in a 12-month period without registering the offering under the full Securities Act regime.

The problem is timing.

The proposal, formally called Regulation Crypto Assets, was released on Aug. 18 and would create two exemptions for certain investment contracts involving crypto assets. One would permit up to $5 million over four years, while the larger fundraising exemption would allow as much as $75 million every 12 months, subject to disclosure and reporting requirements.

SEC Chairman Paul Atkins described the initiative as part of an effort to establish a “fit-for-purpose” framework for crypto capital formation.

Yet the central question is whether crypto founders still want the kind of fundraising system Washington is building.

What the SEC is actually proposing

The Crypto token sale rule is not a blanket exemption for every cryptocurrency or token launch.

Instead, it targets certain “covered investment contracts” involving crypto assets. The proposal would require issuers using the $75 million exemption to provide principles-based disclosures, financial information and ongoing reports while remaining subject to federal securities laws covering fraud and market manipulation.

The SEC is also proposing a conditional safe harbor that could eventually separate a crypto asset from the investment contract through which it was originally offered, provided specified conditions are satisfied.

That makes the proposal more significant than a simple fundraising exemption. It is an attempt to create a regulatory lifecycle for certain token projects—from fundraising through eventual separation of the token from the investment contract.

Hester Peirce, an SEC commissioner and longtime advocate of clearer crypto rules, said the agency’s goal is to create rules that legitimate entrepreneurs can actually follow.

“Rules should be written so that well-intentioned people can follow them,” Peirce said in her statement on the proposal.

The public-comment period is scheduled to close on Oct. 20, 2026.

The market has changed since the ICO era

The timing is difficult to ignore.

During the 2017–2018 ICO boom, crypto projects raised billions of dollars by selling tokens or token-linked instruments to investors. Block.one’s EOS offering raised roughly $4 billion, while Telegram raised more than $1.7 billion before the SEC intervened.

Filecoin also raised $257 million in 2017 through a structure involving a Simple Agreement for Future Tokens, demonstrating that crypto fundraising had already begun experimenting with securities-law exemptions.

The SEC largely responded through enforcement. Block.one eventually agreed to pay a $24 million penalty, while Telegram returned $1.2 billion to investors and paid an $18.5 million penalty after the SEC challenged its token offering.

That history helps explain why the new Crypto token sale rule matters. For years, the industry complained that there was no practical route for many token projects to raise capital publicly while remaining inside the U.S. securities framework.

But the fundraising landscape has since fragmented.

Projects can now use private venture rounds, token warrants, offshore structures, airdrops, points programs, decentralized exchanges and token launch platforms. Those mechanisms can move considerably faster than a traditional securities offering.

Galaxy’s research shows the scale of the private market alone: crypto and blockchain startups attracted more than $20 billion in venture investment during 2025, including $8.5 billion in the fourth quarter.

Launchpads and airdrops expose the timing problem

The biggest challenge for the Crypto token sale rule is that some of crypto’s most active token distribution mechanisms do not resemble the fundraising model the SEC is attempting to regulate.

Meme-coin launchpads such as Pump.fun allow users to create tokens rapidly and rely on automated mechanisms for trading and price discovery. Pump.fun generated $10.74 million in revenue during the week ending Aug. 16, while one day generated $1.73 million—the platform’s strongest daily result since January 30 at that point.

That activity is fundamentally different from an issuer preparing a formal offering document and waiting for regulatory qualification.

Airdrops and points programs create another complication. Protocols can distribute tokens to users based on trading, liquidity provision, usage or other activity rather than selling those tokens directly for cash. The SEC’s March 2026 interpretation specifically addressed airdrops, staking and other crypto transactions, underscoring how different these mechanisms are from conventional securities offerings.

Meanwhile, serious infrastructure companies can continue to seek venture financing through private-market structures rather than public token sales.

That leaves the SEC facing a paradox: it is proposing a cleaner legal road for an activity that many crypto businesses no longer consider their only—and sometimes not even their preferred—route to market.

The $75M ceiling is attractive, but compliance still matters

The Crypto token sale rule could nevertheless become important for projects that genuinely want U.S. retail participation and regulatory legitimacy.

The $75 million annual limit is substantial for an early-stage crypto company. But the exemption comes with obligations that could make it less attractive than private fundraising.

The SEC’s proposal calls for financial statements and continuing reporting for issuers using the larger exemption.

That means projects would have to build compliance operations around an asset class where business models, token economics and corporate structures can change rapidly.

For institutional issuers, however, those requirements may be considerably easier to absorb. Large financial firms already employ securities lawyers, accountants, compliance professionals and reporting teams.

SEC Chairman Atkins has argued that the new framework could help restore U.S. leadership in crypto capital formation. “We are charting a road to invite innovators back to the United States,” he said.

That distinction could determine who actually uses the new regime.

The first wave of applicants may not be meme-coin creators or experimental DeFi protocols. It could instead be established crypto companies and financial institutions looking for a regulated bridge between traditional securities markets and blockchain-based assets.

For now, the Crypto token sale rule remains only a proposal, not a final regulation. Whether it becomes a meaningful fundraising channel will depend on the final language, the compliance costs and, most importantly, whether crypto entrepreneurs believe the benefits of regulatory legitimacy outweigh the speed and flexibility they already have elsewhere.

The SEC may finally be offering crypto a legal fundraising lane.

The market, however, has spent years building highways around it.