SEC Unveils First Formal Crypto Rules, Opening Two Paths for Token Fundraising

The U.S. Securities and Exchange Commission has proposed its first formal crypto rulemaking, Regulation Crypto Assets, and it sets out two paths for selling tokens without registering with the agency. The smaller route would allow a one-time raise of up to $5 million over four years. The larger route would allow up to $75 million in any 12-month period, a cap that lines up with Reg A+ Tier 2 under the JOBS Act framework. Both tracks would require narrative disclosures built on principles rather than a traditional registration statement, closer to a whitepaper than a public offering filing. The $75 million tier would also add financial statements and ongoing reporting. The proposal would preempt state registration requirements for exempt offerings and certain secondary trades. A key part of the plan is a safe harbor. Under the proposal, a qualifying token would stop being subject to an investment contract once the issuer has completed, or permanently stopped, all of the essential managerial efforts it promised. SEC Chair Paul Atkins linked the framework to the Token Safe Harbor first proposed by Commissioner Hester Peirce in February 2020. Morning Minute, written daily by Tyler Warner, says this marks a sharp break from the SEC’s past approach. For a decade, the agency regulated crypto fundraising through lawsuits, suing token issuers one by one without publishing rules that explained what was legal. The newsletter says that absence of an onshore legal path pushed projects toward Cayman and Swiss foundations, non-U.S. buyers, accredited-only Reg D rounds, and airdrops or points programs designed to avoid looking like token sales. If the proposal becomes final, the piece says the U.S. would finally have clear rules for token sales. It also says an ICO wave could follow. The rest of the newsletter covered a busy market session. Crypto majors were green, with SOL leading; BTC traded at $64,500, ETH at $1,920 and SOL at $77.40. Top alt movers included ZRO, GNO and PUMP. Oil rose to $85.80 and gold fell to $4,420, while stock futures were flat. Other items included Robinhood CEO Vlad Tenev calling on U.S. policymakers to modernize securities rules so tokenized stocks can trade domestically, Citi planning to launch Bitcoin custody later this year under its new Custody+ suite, Wyoming’s Stable Token Commission moving FRNT from LayerZero to Chainlink CCIP after a security review, and MoonPay adding Cash App Pay so eligible U.S. customers can buy crypto directly from their Cash App balance. The newsletter also noted Bitcoin ETFs saw $189 million in net inflows on Tuesday and ETH ETFs saw $71 million, while NFT prices were mixed, with Punks at 32.2 ETH, BAYC at 7.9 ETH and Pudgy at 3.78 ETH.