SEC's Regulation Crypto Assets Proposal Paves Way for Token Raises Up to $75M; Ethereum (ETH) Poised

The U.S. Securities and Exchange Commission (SEC) has proposed a new rule, Regulation Crypto Assets, that would create a legal onshore route for altcoin projects to raise funds through token sales without full securities registration — a framework some industry participants are already likening to the return of the initial coin offering (ICO) model that faded after 2017. Commissioner Hester Peirce, whose 2020 safe harbor proposal informed the design, said the draft gives entrepreneurs a path past what she called an ill-fitting set of rules long applied to the industry. Under the proposal, smaller projects qualify for a startup exemption capped at $5 million raised over four years, with no accredited-investor requirement and no ceiling on individual buy-ins. Larger raises fall under a fundraising exemption of up to $75 million per year, and issuers entering that tier must file audited financials and keep up with ongoing reporting once they cross the threshold. Both tiers remain subject to the SEC's standard antifraud and antimanipulation rules, and the draft would preempt state securities registration for qualifying offerings. The plan builds on a March interpretation issued jointly by the SEC and the Commodity Futures Trading Commission (CFTC) that spelled out when a token can no longer be tied to an investment contract, the legal test regulators use to classify a digital asset as a security. The rule stops short of the separate tokenized-securities framework some in the industry had pushed for, which was not part of Tuesday's proposal. If adopted in its current form, it would be the first federal rule giving U.S. teams a legal path to sell tokens onshore since the enforcement campaign that ended the 2017 boom. The SEC is accepting comments for 60 days before any final adoption, and Peirce framed the proposal as one step on a longer road, inviting feedback on how tokens might function more like equity so holders can share in a network's growth.

The proposal marks the first time since the 2017 ICO boom that token-based fundraising in the U.S. would have a clear, dedicated legal lane — a structural shift some builders compare to the model's original promise before regulators shut it down. Grayscale's research desk made the point explicitly, noting that token-based fundraising in the U.S. has lacked a dedicated regulatory framework since that boom, and arguing Regulation Crypto Assets could bring more token offerings onchain while driving value to networks such as Ethereum. The 2017 boom itself collapsed after the SEC began treating most token sales as unregistered securities offerings and brought enforcement actions; in the years since, teams resorted to a patchwork of workarounds, routing sales through offshore shell entities, barring U.S. buyers from participation, confining raises to accredited investors under Regulation D, or relabeling distributions as airdrops and points programs. The $5 million startup lane is notable for stripping away the accredited-investor gatekeeping that has defined U.S. crypto fundraising for roughly eight years, a structural echo of what 2017-era ICOs attempted. The key difference this time, the SEC's text notes, is that issuers in both lanes remain obligated to provide principles-based disclosures to investors, and the top tier demands audited financials — something most ICO-era projects never produced. The rulemaking also lands during a political vacuum, as lawmakers departed for summer break without a vote on the CLARITY Act, a bill meant to split crypto jurisdiction between the SEC and the CFTC, leaving the commission to advance the agenda through its own rulemaking. For teams that spent years operating through offshore vehicles, the draft effectively offers a way back onshore, though the 60-day comment window will determine how much of that structure survives in the final version. Whether a genuine ICO-style wave actually follows will ultimately depend on which altcoins are best positioned under the new compliance tiers.

The official SEC filing behind Tuesday's announcement makes explicit that Regulation Crypto Assets is a proposal, not a final rule, entering a 60-day comment period with no exemption available to issuers today. If adopted, the rule would bind issuers that elect either fundraising lane — obligating the $75 million tier to audited financials, holding both tiers to SEC antifraud jurisdiction, and preempting state registration for qualifying offerings. The March SEC-CFTC interpretation remains the operative authority on when a token decouples from an investment contract, and Peirce's accompanying statement on the SEC's newsroom invites comment on equity-like token designs. Our reading: this is the first deliberate regulatory doorway for token issuance since 2017; its final form will decide how much stays onshore.