The U.S. Securities and Exchange Commission has proposed new exemptions under Regulation Crypto Assets, allowing crypto startups to raise up to $5 million over four years and larger projects up to $75 million per year without full securities registration. The proposal, unveiled on Aug. 18, is intended to open a legal route for public token sales after years of enforcement actions pushed much of the fundraising business offshore. It is now open for public comments for 60 days after publication in the Federal Register.
Bloomberg News warns the fix may be belated. During the ICO peak in January 2018, projects raised about $3 billion in a single month, often with little more than a white paper and a newly issued token. Today investor demand has shifted: capital is concentrated around Bitcoin and a smaller group of established assets, while speculative money has moved into perpetual futures, prediction markets and AI-linked stocks. GSR research analyst Carlos Guzman said 'ICOs of 2026 are not the ICOs of 2018. The days when a white paper and a dream were enough to attract capital are over.'
The proposal includes two routes: a startup exemption capped at $5 million over four years, and a fundraising exemption allowing up to $75 million in any 12-month period. Both require disclosures, and the larger route would require financial statements and ongoing reporting. A conditional safe harbor could allow a token to exit investment-contract treatment once the issuer completes or permanently ends the managerial work promised to investors.
Venture investors offered mixed views. Dragonfly general partner Tom Schmidt said it is 'obviously better than nothing, but would have been helpful to have this a few years ago,' adding that market structure questions tied to the CLARITY Act are more pressing. Strobe Ventures partner Winnie Lau said the proposal makes her 'cautiously optimistic' and called it a step in the right direction. Pantera Capital's Cosmo Jiang argued the previous environment was 'the exact opposite of functional capitalist society,' where memecoins were effectively legal but tokens designed to produce value were not.
The CLARITY Act remains the larger unresolved piece. It would divide digital assets into digital commodities, investment contract assets and permitted payment stablecoins, and assign regulatory responsibilities between the SEC and CFTC. A 616-page merged Senate draft was released in July, but debate has continued into August, with ethics provisions and other disputes holding up passage. The SEC and CFTC issued a joint interpretation in March setting out categories for digital assets.
Market conditions add another challenge. Bitcoin remained down nearly 10% for 2026 despite a recent recovery, while gold gained more than 7%. Still, gold and Bitcoin ETFs attracted a combined record $7 billion over five trading days through Tuesday. Crypto prices were still recovering from the sharp October selloff. In April, crypto companies raised about $860 million across 55 disclosed deals, with centralized finance accounting for roughly $606 million and two centralized exchanges representing about $580 million of that total.
