SEC's Reg CA proposal opens path for token fundraising up to $75M

The SEC proposed a regulatory framework on August 18 that would let crypto projects raise up to $75 million through token sales without full securities registration. The proposal, called Regulation Crypto Assets or Reg CA, creates two exemptions. A startup exemption allows raises of up to $5 million over four years. A larger fundraising exemption permits raises of up to $75 million within any 12-month period, with layered disclosure requirements that include audited financial statements for larger raises.

The most consequential piece is a conditional safe harbor. Under it, certain crypto assets could be reclassified as non-securities once the original issuer's managerial efforts are completed or discontinued. That provision could allow tokens sold under Reg CA to eventually trade on US exchanges without being labeled securities, a step the SEC has resisted since the 2017 ICO boom.

Reg CA marks a sharp turn from the agency's post-2017 enforcement campaign, which brought dozens of lawsuits and cease-and-desist orders against projects that sold tokens without registration. The proposal builds on interpretive guidance the SEC issued in March 2026 that began classifying crypto assets more precisely. Now the agency is attaching actionable fundraising pathways to that classification work.

The tiered structure matters for the kind of project that can use each exemption. A project raising $2 million under the startup exemption faces lighter disclosure requirements than one seeking $75 million under the fundraising exemption. Larger raises demand audited financials and more detailed operational disclosures, designed to prevent a repeat of 2017's free-for-all.

Industry observers have called the potential outcome "ICO 2.0," though the comparison only goes so far. Reg CA's principles-based reporting and antifraud protections are meant to give investors better information than the white-paper era offered. The safe harbor also addresses a long-standing complaint from crypto projects: that tokens sold in a compliant fundraising round can still be treated as securities indefinitely, limiting secondary trading.

The proposal arrives after legislative efforts stalled in Congress. The CLARITY Act, which would have established similar distinctions between securities and non-securities in the crypto context, failed to advance. The SEC is moving ahead through rulemaking, which does not require congressional approval.

For existing tokens like Bitcoin and Ethereum, which the SEC already treats as non-securities, Reg CA has no direct effect. But new projects raising under the framework could see their tokens eventually achieve the same status via the safe harbor, potentially opening the door to trading on US exchanges.

The public comment period runs through October 20, 2026.