SEC Proposes New Exemptions for US Token Sales Amid Declining ICO Demand

The U.S. Securities and Exchange Commission has unveiled a draft framework, Regulation Crypto Assets, that would create two exemptions for public token fundraising. The proposal aims to restore a legal pathway for U.S. investors to participate in token sales while imposing disclosure and reporting requirements.

Proposed exemptions

• Early‑stage startup exemption: Allows projects to raise up to $5 million over a four‑year period without full registration.
• Fundraising exemption: Permits issuers to raise up to $75 million in any 12‑month period, subject to financial‑statement filing and ongoing reporting.

Regulatory safeguards

Both exemptions require issuers to provide principle‑based disclosures to investors. The larger exemption adds financial‑statement and continuous reporting obligations. Federal antifraud and antimanipulation rules would continue to apply, and a conditional safe‑harbor provision would let a token exit “investment‑contract” treatment once the issuer’s promised managerial work is completed or permanently ceased.

Market context

Investor demand for new tokens has dropped sharply since the 2018 ICO peak, when monthly fundraising reached about $3 billion. Capital has shifted toward established assets such as Bitcoin and toward other speculative products, including perpetual futures, prediction markets, and AI‑linked equities. In April 2026, disclosed crypto fundraising totaled roughly $860 million, with centralized finance projects receiving about $606 million and infrastructure and DeFi projects receiving $105 million and $90 million respectively.

Industry reaction

Venture investors see clearer rules as a potential benefit for legitimate token projects, though many note that fundraising is no longer the sector’s most pressing regulatory concern. Some executives expressed optimism that the proposal offers a “step in the right direction,” while others argued that market‑structure issues remain more urgent.

Next steps

The SEC has opened a 60‑day public comment period following the proposal’s publication in the Federal Register. The framework proceeds independently of the pending Digital Asset Market CLARITY Act, which would allocate regulatory authority between the SEC and the CFTC.