SEC Proposes Rulebook for Token Offerings with $75 Million Exemption

The Securities and Exchange Commission (SEC) has proposed Regulation Crypto Assets, a new rulebook for token offerings. This move follows years of applying decades-old securities law to crypto sales through enforcement actions.

The proposal targets 'covered investment contracts,' which are crypto assets sold with a promise of future managerial effort by the founding team. It builds a registration-exempt path for this arrangement, allowing projects to raise up to $5 million across a four-year window without needing audited financials.

Two larger fundraising exemptions have also been proposed: Tier 1 allows $20 million over any 12-month period without audited statements, while Tier 2 raises the ceiling to $75 million and requires periodic reporting. Importantly, issuers must organize in the US with a majority of US-based executives.