The startup exemption allows offerings up to $5 million over a four-year period. The fundraising exemption, modeled partly on Regulation A, permits up to $75 million per year, giving token projects a clearer path to capital than the current enforcement-first approach.
Once a project completes its promised development or stops essential managerial efforts, it gains a conditional safe harbor from the SEC's "investment contract" definition, reducing enforcement risk as protocols mature.
The SEC opened a 60-day comment period following Federal Register publication, signaling openness to industry input on implementation details before finalization.
Clear fundraising rules lower legal friction for startup projects and institutional participation in token launches, potentially accelerating adoption of Ethereum, Solana, and emerging L1 chains competing for project ecosystem growth.
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