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SEC
2026-08-26 13:50:56

SEC crypto asset proposal seen as unlikely to spark another ICO boom

The U.S. Securities and Exchange Commission’s proposed "Regulation Crypto Assets," released on Aug. 18, would create two exemptions for certain investment contracts tied to crypto assets, opening defined fundraising channels for token issuers in the United States. One exemption would let startups raise up to $5 million in a single offering over four years, while another would allow eligible issuers to raise as much as $75 million in any 12-month period, with the possibility of conducting separate offerings in later years. Lawyers and regulatory specialists quoted in the report said the framework is more structured than the market environment seen during the 2017 ICO cycle. Winston & Strawn partner Drew Hinkes said a project could theoretically raise $75 million every 12 months if each round is genuinely independent. Sidley fintech and blockchain practice head Lilya Tessler, however, said follow-on fundraising would not be automatic: issuers would need to refile offering materials, undergo SEC staff review, and continue filing annual and semiannual reports. The proposal would also cap participation by non-accredited investors at 10% of the greater of annual income or net worth. Duke University financial regulation expert Lee Reiners said the limited first-round cap could make early token allocations more attractive, but he does not expect a return to the ICO frenzy of 2017, noting that as many as 90% of projects that raised through ICOs from 2017 to 2019 ultimately failed. The SEC estimates about 130 offerings a year would use the two exemptions, while roughly 475 issuers could rely on a broader investment contract safe harbor.

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