SEC Proposes Crypto Rules to Boost Public Token Sales with Up to $75M Annual Limit

The US Securities and Exchange Commission (SEC) has proposed new rules for crypto assets that could make public token sales easier in the country. The proposal would allow qualifying issuers to raise up to $75 million during any 12-month period, with potential for serial raises of the same amount every year as they build out their networks.

According to Lee Reiners, a Duke University lecturing fellow and financial regulation expert, this is unlikely to bring back the freewheeling initial coin offering (ICO) mania of 2017. He notes that fundraising markets are shaped by investor appetite, token economics, liquidity, custody, and the reputational damage left by previous ICOs.

The SEC's proposal would create two exemptions for certain investment contracts involving crypto assets: a one-time exemption for startups with offerings up to $5 million over four years, and a larger fundraising exemption allowing up to $75 million in each 12-month period. This latter exemption is modeled on Regulation A and comes with disclosure and ongoing reporting requirements.

Experts say that the $75 million limit could allow projects to raise funds in chunks and return to investors later with a more developed network and higher valuation, potentially making early allocations more attractive to investors.