SEC Proposes Framework for Regulating Token Fundraising

The US Securities and Exchange Commission (SEC) has proposed a new framework for regulating token fundraising in the country. The proposal creates two routes for certain token investment contracts, offering temporary relief from full Securities Act registration.

Under the plan, startup issuers could raise up to $5 million once across a four-year period, while larger qualifying offerings could reach $75 million per 12-month period.

The SEC has introduced a conditional safe harbor that would allow an issuer to complete or permanently end promised managerial work on a crypto asset. If the conditions are met, the covered investment contract would be deemed to have ended, and the underlying asset would no longer be subject to federal securities statutes.