SEC proposes Regulation Crypto Assets to bring back token fundraising under new rules

The SEC just proposed a regulatory framework that would have been unthinkable three years ago: a structured path for crypto projects to sell tokens to the public without going through the full gauntlet of securities registration. The proposal, called Regulation Crypto Assets, or Reg CA, landed on August 18 and represents the most significant shift in how the US treats token fundraising since the agency spent years systematically dismantling the initial coin offering model that defined 2017’s crypto boom. What Reg CA actually does The framework creates two distinct exemptions for projects looking to raise capital through token sales. The first is a one-time “startup exemption” that lets projects raise up to $5 million over a maximum of four years. The second, more ambitious path is a recurring “fundraising exemption” that permits raising up to $75 million within any 12-month period, with layered disclosure requirements and audited financial statements for larger raises. Perhaps the most consequential piece of the proposal is a conditional safe harbor. Under this provision, certain crypto assets could be reclassified as non-securities once the original issuer’s managerial efforts are...