The US Securities and Exchange Commission is proposing a new exemption that could let some crypto projects sell tokens to the public without going through full securities registration, marking a notable change from the agency’s approach after the 2017 initial coin offering boom.

According to a Bloomberg report published on August 27, the draft framework would permit early-stage issuers to raise up to $5 million a year and larger projects up to $75 million. Even so, it is unclear whether looser rules would revive token fundraising at a time when investor demand for ICO-style offerings has weakened sharply.

A narrower route for token sales

Under the SEC proposal, qualifying crypto issuers would be able to conduct public token sales under an exemptive framework rather than complete full securities registration. The structure would create two fundraising tiers, with a lower ceiling for early-stage projects and a higher cap for more established issuers.

The reported limits are $5 million annually for smaller, earlier projects and $75 million for larger ones. If adopted, the framework would represent one of the clearest federal paths yet for lawful public token fundraising in the US, though the proposal’s final form and market impact remain uncertain.

A break from the post-2017 crackdown

The move stands out because it departs from the SEC’s tougher stance toward token issuance after the ICO surge of 2017. At that time and in the years that followed, the agency took a hard line on offerings that it viewed as securities sales.

The market backdrop is now very different from the one that produced the original ICO boom. Capital has migrated toward major cryptocurrencies such as Bitcoin, and toward other segments including perpetual futures and prediction markets. The source article also notes that crypto venture capital investment in tokens has dropped sharply since 2025.

Industry reaction centers on timing and clarity

Some industry figures see the proposal as coming after the most active period for ICO fundraising has already passed. Tom Schmidt, a general partner at Dragonfly, said the framework would have been more useful a few years ago, suggesting the timing may limit its practical effect on capital formation.

Schmidt also said market-structure questions addressed by the CLARITY Act now rank as a more pressing issue for the sector than fundraising access. That view points to a broader industry concern that legal certainty around how crypto markets operate may matter more than reopening a token-sale channel.

Why the proposal may still matter

Even if demand for token fundraising remains subdued, the SEC plan could still be important because it addresses a long-running source of regulatory uncertainty. One provision would allow the investment-contract relationship created during a token sale to end once an issuer completes the development and management work it promised, or permanently ceases those activities.

That feature could give projects and market participants a clearer basis for understanding when a token sale no longer carries the same securities-law implications it did at launch. Carlos Guzman, a research analyst at GSR, said ICOs in 2026 differ from those in 2018, adding that the period when teams could raise money with little more than a white paper and an idea is over.

What comes next

For now, the proposal signals a softer SEC approach to token issuance, but not a guaranteed revival of the ICO market. The key confirmed facts are the planned exemption, the two fundraising caps, and the effort to define when an investment-contract relationship can end.

Whether the framework translates into meaningful new issuance will likely depend less on the rule change alone than on current investor appetite, which the source describes as much weaker than during the last major ICO cycle.

Source: en.bloomingbit.io