U.S. Securities and Exchange Commission headquarters with a restrained yellow-orange crypto network treatment

SEC Opens a $75 Million Crypto Fundraising Path—and a Way for Tokens to Leave Securities Status

By Isaac • August 22, 2026 11:15 am • Comments

The Securities and Exchange Commission has put something on the table that the American crypto industry has demanded for years: rules built for token projects instead of a forced march through a securities framework written for traditional stocks.

The proposal is called Regulation Crypto Assets. Its headline provision would let qualifying issuers raise as much as $75 million in a 12-month period.

But the most important part may be what happens later. The same package creates a formal route for a crypto asset to separate from the investment contract under which it was originally sold.

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That is a major shift. It acknowledges that a token and the promises made by the team selling it are not necessarily the same legal object forever.

The SEC proposal creates two fundraising tracks. A startup exemption would permit eligible projects to raise up to $5 million over four years.

That smaller lane is designed for early network development, while the larger route asks issuers to disclose far more about the token, the people running the project and the work buyers are funding.

A larger fundraising exemption, modeled in part on Regulation A, would allow Tier 1 offerings of up to $20 million and Tier 2 offerings of up to $75 million during any 12-month period.

The larger path would carry substantially heavier obligations. Issuers would face disclosure requirements covering the crypto asset, its supply, governance, source code, development plan, security practices, management and conflicts.

Tier 2 issuers would also have to provide audited financial statements and ongoing reports. Antifraud and antimanipulation rules would continue to apply.

Those limits leave federal oversight firmly in place. The SEC is proposing a tailored route with defined eligibility rules, mandatory project disclosures and continuing accountability if an issuer hides material facts or manipulates buyers.

The SEC announced the proposal directly:

The proposal is aimed at a specific problem. A crypto asset may not itself be a security, yet it can be sold as part of an investment contract when buyers rely on a development team’s promised work.

The SEC’s framework tries to regulate that fundraising arrangement without treating the underlying token as permanently trapped inside the contract.

Under proposed Rule 400, an issuer could use a conditional safe harbor after it has completed—or permanently stopped—the essential managerial work it promised. The issuer would file a transition report explaining its conclusion.

If the conditions are satisfied, the SEC would no longer treat the crypto asset as subject to that investment contract.

The plan does not declare every token outside securities law. It is a defined process with filings, factual certifications and continued exposure to fraud enforcement.

The SEC could still challenge a project that misstates whether its promised work is actually finished.

SEC Chairman Paul Atkins presented the package as an effort to bring crypto capital formation back to the United States. He argued that applying old rules to network development created needless friction, drove investment offshore and limited the protections available to American buyers.

Atkins said the new exemptions pair room to build with principles-based disclosures tailored to crypto assets. The startup lane covers up to $5 million over four years, while the fundraising lane reaches $75 million per year and adds financial-condition reporting that can include audited statements.

His statement also makes clear that the safe harbor addresses the investment contract surrounding a non-security crypto asset. An issuer must certify that it has ended the essential managerial efforts it promised and satisfy the proposal’s other conditions before the SEC would release that asset from the contract framework.

Commissioner Hester Peirce, who has advocated a token safe harbor for years, celebrated the release while stressing that it is still only one step:

In her separate SEC statement, Hester Peirce traced the proposal back to years of complaints about rules that did not fit crypto networks. She credited public input to the Crypto Task Force and described the framework as an attempt to make compliance clear enough for legitimate builders to follow.

Peirce emphasized that both fundraising exemptions would use principles-based disclosures and retain normal antifraud and antimanipulation protections. She also highlighted the safe harbor, which would let an issuer formally delink a crypto asset from its investment contract after the promised managerial work is completed or permanently ceased.

Her caution matters as much as her support. Peirce said the proposal will not fit every model, asked the industry for detailed feedback and described the package as one step toward a broader enforceable framework rather than the final word on crypto regulation.

A detailed Venable analysis shows where the boundaries sit. The exemptions apply to covered investment contracts involving crypto assets, not tokenized stocks, bonds or other assets that are securities in their own right.

The law firm notes that the $75 million Tier 2 path comes with audited financials and ongoing reporting, while the $20 million Tier 1 route has a lighter financial-statement burden. Issuers would also have to satisfy eligibility rules, provide the required forms and disclosures, and avoid the proposal’s bad-actor disqualifications.

Venable also points out that the Rule 400 safe harbor would be non-exclusive. A project could still make its case under the Howey test without using Rule 400, but the proposed filing route would give the market a public date and a concrete explanation to evaluate.

The timing matters. Congress has yet to finish a durable market-structure law, so the SEC is using its existing authority to give builders a route forward.

CryptoSlate emphasizes the real tradeoff: the framework could make domestic token fundraising workable, but projects will have to decide whether the disclosure load and continuing obligations justify using it.

The choice would scale with the amount raised. A small team could seek up to $5 million over four years, while a project using the $75 million Tier 2 route would accept audited financials, ongoing reports and detailed disclosures about its token, code, governance, security and development plan.

The separate Rule 400 process adds another decision point. A team that finishes or permanently abandons its promised managerial work could file a transition report and seek to separate the token from the original investment contract, but the SEC could challenge a false certification and enforce the proposal’s antifraud rules.

Nothing changes overnight. Regulation Crypto Assets is a proposal, not a final rule, and the public comment process comes before any adoption vote.

The $75 million lane cannot be used today.

Still, the direction is hard to miss. The SEC is moving away from the idea that crypto projects should somehow squeeze themselves through a door designed for conventional securities.

For legitimate builders willing to disclose what they are raising, what they promise to build and when that work ends, Washington may finally be designing an entrance that actually fits.

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