SEC Proposes $75 Million Token Offering Exemption, Comments Due by October 20, 2026

The U.S. Securities and Exchange Commission (SEC) has proposed a separate rule for exemptions from registration for token offerings related to cryptocurrency investment contracts. The deadline for submitting comments is October 20, 2026. This proposed rule aims to create a securities offering framework tailored to investment contracts involving cryptocurrency assets. The exemption pathways are divided into startup exemptions and funding exemptions, allowing startups to raise up to $5 million over four years, Tier 1 to raise up to $20 million over 12 months, and Tier 2 to raise up to $75 million. The SEC requires issuers to provide principle-based disclosures and imposes obligations for financial statements and ongoing reporting for funding exemptions. Anti-fraud and market manipulation regulations will still apply. The safe harbor structure ensures that once issuers complete their promised management efforts, the cryptocurrency will no longer be treated as an investment contract. Various companies have submitted comments on the public comment page, but feedback from major exchanges and asset management firms has yet to be prominent. The legal industry does not view this proposal merely as an adjustment of offering limits, and the SEC is expected to facilitate capital raising and innovation.

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