US Token Fundraising Rules Explained: What the SEC’s Proposed Regulation Crypto Assets Means for Token Sales

In August 2026, the SEC proposed a new set of rules for token offerings called Regulation Crypto Assets. Most headlines focused on one figure. A company could raise up to $75 million a year through a token sale without full SEC registration.

That figure covers most of the market. Fundraising data from The Tie tracks 1,298 crypto funding rounds with a disclosed size over a trailing 12-month period. About 91% of them raised $75 million or less, and 56% raised $5 million or less.

The headline leaves out three important facts. First, the rule is still a proposal, and it already faces pushback. On October 20, 2026, New York Attorney General Letitia James filed a comment letter opposing the proposal. Her objections include the way it would override state registration rules.

Second, the rule covers only a narrow type of token. Third, its largest tier brings a heavy reporting load. This article explains each point in plain terms, so business owners can judge whether the proposal fits their plans.

What Are the Proposed US Token Fundraising Rules (Regulation Crypto Assets)?

Regulation Crypto Assets is a set of proposed SEC rules for raising capital through token offerings. The SEC proposed it on August 18, 2026. Sidley Austin’s analysis of the proposal describes it as the first set of offering rules built for token-related investment contracts.

The basic problem it addresses is simple. Under US securities law, a token sale can create an investment contract, which counts as a security. Selling a security requires SEC registration or an exemption. Until now, token offerings had to work within disclosure rules designed for stocks and bonds.

The proposal starts from one key idea. The security is the deal around the token, not the token itself. This idea shapes each of the framework’s four parts.

1. Startup exemption.
   It is a one-time route for early-stage projects. A team can raise a limited amount of money without full SEC registration while it builds its network.
2. Fundraising exemption.
   Built for larger raises. It allows more money to be raised but asks for more in return. The issuer goes through SEC review before any sale and files ongoing reports after it.
3. Safe harbor.
   Which covers what happens after the raise. A token sold under an investment contract is tied to the work its issuer promised to do. Once that work is complete, the safe harbor would let the token leave the investment contract, and securities law along with it.
4. Deals with state law.
   Each US state can apply its own securities registration rules, which market participants have described as a patchwork. The proposal uses a legal term, qualified purchaser, to let federal rules override those state requirements.

In practice, sales under the two exemptions would not need state-by-state registration. The SEC release says the rules would preempt state registration and qualification requirements for offers and sales under an exemption. It also covers certain secondary market transactions, so later resales by buyers would get the same treatment, as long as the issuer stays current with its filings. The release names registration and qualification only. A company should ask its securities counsel which other state rules still apply. New York's Attorney General has already objected to this override.

Together, the four parts follow a token from sale to exit. For companies weighing a token sale, the two exemptions decide how much they can raise and how. The safe harbor decides what happens to the token afterward. Before looking at either in detail, it helps to confirm whether the proposal is in force at all.

Is Regulation Crypto Assets Final?

No. Regulation Crypto Assets is still a proposal, not a final rule. Until the SEC adopts a final version, none of its routes can be used for a token sale.

The proposal follows the SEC's March 2026 interpretation of how federal securities laws apply to certain crypto assets. The safe harbor builds on that earlier guidance. The SEC release set the comment period at 60 days after the proposing release was published in the Federal Register. It closed on October 20, 2026. Supporters and critics both used it to push for changes. Circle, for example, asked the SEC to clarify several parts of the framework, including how technical work after launch is treated.

The proposal itself invites this debate. It includes about 150 requests for comment, so the final rules could look meaningfully different from the draft.

With that status in mind, the next step is to separate two tools that headlines often blend together.

Exemptions vs. Safe Harbor: Which Token Fundraising Route Applies?

An exemption lets a company sell securities without full SEC registration, as long as it meets set conditions. A safe harbor is a set of conditions that, once met, gives a company legal certainty about how a rule applies to it. In this proposal, the exemptions cover how tokens are sold, and the safe harbor covers when they leave securities law.

An exemption does not change what is being sold. A token sold under either exemption is still part of an investment contract, which is a security. The exemption only removes the need for full registration, and antifraud rules still apply.

The safe harbor changes the token’s status instead. Once the issuer finishes the work it promised and files a certification, the token would no longer be treated as part of an investment contract. From that point, it would sit outside federal securities law.

Put simply, the exemptions are the on-ramp into the framework. The safe harbor is the off-ramp out of it.

The two tools also work separately. A company could use the safe harbor even if it never used either exemption.

The exemptions are where the headline dollar figures come from, so they are the next stop.

How Much Can a Token Sale Raise Under the Proposal?

If adopted as proposed, a token sale could raise up to $5 million over four years under the startup exemption. For comparison, the token fundraising campaigns TokenMinds runs today raise between $0.5 million and $5 million. Amounts sit on the lower side at present, because the market is in a crypto bear market and this limits how much can be raised at first. Larger raises would use the fundraising exemption. Its Tier 1 would allow up to $20 million in a 12-month period, and Tier 2 would allow up to $75 million.

A few details sit outside the table. The startup exemption covers more than sales. Certain airdrops, staking and governance distributions, and gas fees can also fall under it.

The fundraising exemption works much like a public offering and draws largely on Regulation A, an existing SEC exemption. Before SEC staff qualify the offering, the issuer can test the waters by collecting nonbinding interest. Non-accredited investors could put in no more than 10% of their annual income or net worth, whichever is greater, according to Hunton's summary of the proposal.

Under both exemptions, buyers could resell their tokens freely, since the tokens would not be restricted securities. In TokenMinds' practice, a token sale is usually split into two rounds. The private round gives the biggest token discounts and goes to crypto funds and high-net-worth investors. The public round runs through launchpad partners and reaches retail investors. Each round needs to fit the chosen route, so the team should confirm with securities counsel how both would be handled.

So can a business raise $75 million with a token today? Not yet, because the rule has not been adopted. Even after adoption, Tier 2 would carry the heaviest disclosure and reporting load of any route.

What Disclosures Does a Token Sale Require?

Every route starts with the same core disclosures, set out in proposed Rule 103. The fundraising tiers then add ongoing reports on top. The safe harbor has its own filing, separate from both.

Core Disclosures for Every Route

Proposed Rule 103 is principles-based. It names the topics an issuer must cover but leaves the format open. The ten topics are:

• The investment contract
• The offering
• The crypto asset being sold
• Management, related persons, and conflicts of interest
• The crypto network or application and its plan of development
• Security and source code
• Token economics and allocation
• Governance
• The token’s ecosystem
• Risk factors

Sidley Austin’s review of the proposal explains where these disclosures go. Under the startup exemption, the issuer posts them free of charge on a website named in its notice. Under the fundraising exemption, the same disclosures go into the Form 1-CRYPTO offering statement.

The disclosures must also match what the issuer says elsewhere. The proposal requires them to be consistent with the issuer’s public statements, including its website and social media. For most projects, that includes the whitepaper, and Sidley advises issuers to check whether existing whitepapers already align with Rule 103.

Financials, SEC Review and Ongoing Reports

The table above shows how financial statements scale with the size of the raise. The bigger difference comes after the sale. Once SEC staff qualify an offering, the issuer takes on ongoing reporting duties:

• An annual report on Form 1-KC within 120 days after the fiscal year ends
• A semiannual report on Form 1-SC within 90 days after the period ends
• Current reports on Form 1-UC within four business days of specified events, similar to a Form 8-K
• A transition report on Form TR

For a business owner, the work does not end when the sale closes. That makes the safe harbor’s exit conditions an important part of the plan.

What the Safe Harbor Itself Requires

The safe harbor adds no new disclosure document. Instead, it rests on two conditions:

• The promised work is finished. The issuer has completed or permanently stopped all the essential managerial efforts it promised, with no new ones planned.
• A Form TR is filed. The issuer certifies that these conditions are met and includes a supporting analysis.

The SEC’s proposing release explains what counts as promised work. Detailed milestones and timelines likely count. Vague promises likely do not, and post-launch maintenance would not. A detailed roadmap may therefore become work the issuer must finish before it can exit.

New York’s Attorney General has objected to this self-certification in a comment letter, since it happens without SEC review.

Disclosures and filings only matter if a company qualifies in the first place. That depends on a short set of eligibility tests.

What Are the Eligibility Tests?

The sections above cover how much a token sale could raise and what it would need to disclose. None of that applies unless the company qualifies first. Eligibility turns on three things: what the token is, where the issuer is based, and the issuer’s history. A company needs to pass these tests before any dollar limit or filing duty matters.

• Covered investment contract test.
  The investment contract must involve a crypto asset. That crypto asset must not itself be a security, and no other asset can be subject to the contract.
• US entity test.
  For the fundraising exemption, the issuer must be a US entity. A majority of its executive officers or directors must be US citizens or residents. More than 50% of its assets must be in the US, and its business must be run mainly from the US.
• Excluded issuers.
  Blank-check companies, registered investment companies, and business development companies cannot use the fundraising exemption. The same applies to issuers with a Section 12(j) order in the past five years.
• Bad actor rules.
  Proposed Rule 104 follows Regulation A’s disqualification rules. Conduct from before the rule takes effect does not automatically disqualify an issuer, but it must be disclosed in writing to each buyer.

The US entity test has a direct effect on companies based outside the United States. Within this proposal, a non-US issuer could raise capital only through the startup exemption, which is capped at $5 million. In practice, TokenMinds often sets up offshore incorporation for token sales, in places such as Panama, Cayman or BVI. No license is needed there, and a bank account can be opened. ConcentricDAO, for example, set up a Panama LLC with TokenMinds' help to manage its token sale proceeds. Selling to US investors is also hard for now, because SEC rules must be cleared first. For this reason, TokenMinds currently targets global investors.

Case study: Nova Protech The Nova Protech case study shows how a non-US issuer can set up. It incorporated in Singapore, drawing on the country's financial regulations, low corporate tax rates and support for blockchain-based ventures. This let it tokenize corporate assets such as intellectual property and offer global investors liquidity. Under this proposal, that choice would carry a trade-off. A non-US issuer with an in-scope token could use only the startup exemption.

The first test carries the most weight for operating companies, because it decides whether the proposal applies at all.

Does Regulation Crypto Assets Apply to Operating Companies?

Of the eligibility tests, the covered investment contract test matters most for operating companies. It decides whether the proposal applies at all. The proposal was built for tokens tied to a crypto network or application, and its scope is deliberately narrow.

Equity, debt, and other traditional securities in token form sit outside the framework. Those tokens still need the offering routes that exist today. A token tied to real-world assets raises a different question from a network token, so structure comes first. The ConcentricDAO case study shows one way to handle this. ConcentricDAO, a project tokenizing real-world assets, set up a foundation to hold those assets. It needed a compliant legal structure that kept regulatory transparency for investors. TokenMinds then helped it set up a Panama LLC, and the proceeds of its asset-backed token sale were routed to that LLC. The rest of the proposal points the same way, since its disclosures center on the network and its safe harbor assumes the network will one day run without the issuer’s promised work.

For any crypto capital raise, the token’s design comes first and the dollar limit second. Companies looking to raise crypto capital without giving up equity need to confirm early that the token is not itself a security. The same applies to a token sale for a small-cap company. When a token falls outside the scope, the company and its securities counsel need to choose an existing offering route.

Whichever route applies, the preparation work can start well before a final rule.

How to Prepare a Token Sale Before the Rule Is Final

Business owners can prepare a US token sale now without betting on the final text. The steps below run in a working order, from picking a route to tracking the final rule. These steps follow Sidley’s practical guidance. TokenMinds adds one step from its own launch work, shown last in the list.

• Match the raise to a route. Compare the planned raise size and timeline with each exemption.
• Review past public communications. The startup exemption covers only transactions after Form NOR is filed. Sidley warns that earlier marketing may count as an offer outside the exemption.
• Prepare the disclosure package. Check the whitepaper against Rule 103. For Tier 2, plan for audited financial statements.
• Write roadmap promises with care. Detailed promises may become managerial efforts the issuer must finish before using the safe harbor.
• Run bad actor diligence. Check past conduct that could disqualify the issuer or require disclosure.
• Track the final rule with securities counsel. The final text may change the routes, limits, or conditions.
• Test investor interest before paying for marketing (TokenMinds step). Start with tokenomics. Then present the concept to investors in a survey to see how much they would invest. This keeps a client from spending the full launch budget before it knows whether the project works.

A token sale readiness checklist helps teams track these steps in one place. Sale operations belong on it too. In TokenMinds' launch work, a wallet connection and KYC check come before any contribution. Sale, vesting and staking logic stays in audited contracts, not in the backend. They also fit inside the wider process covered in this guide on how to launch a token.

How Do Launchpads and Exchange Listings Fit In?

The public round of a token sale usually runs through launchpad partners, so the choice of launchpad is part of the legal plan. A launchpad check can use four questions:

• Does the launchpad accept this type of token?
• Does it accept buyers from the regions the project targets?
• Does its sale timing fit the chosen route and the raise plan?
• What disclosure does it ask for, and does this match Rule 103?

The first exchange listing needs the same care. A project should pick a listing it can realistically get, and the listing materials must match the issuer's public statements. Securities counsel should review both choices before any sale date is set.

Get a Token Fundraising Fit Assessment With TokenMinds

A US token sale under Regulation Crypto Assets starts with fit, not the $75M headline. The sections above show that fit depends on the token’s scope, the size of the raise, and the team’s capacity to carry disclosure and reporting. The rules are also still a proposal, so any plan needs room to change.

TokenMinds has run token launches end to end since 2017, and works on token sale strategy, tokenomics, and go-to-market for companies planning a crypto capital raise. The work covers route mapping between the proposed framework and existing offering paths, token economics and allocations built for disclosure, whitepapers aligned with the proposal’s disclosure list, and investor-facing materials prepared alongside the company’s securities counsel. Its token fundraising fit assessment reviews a company’s token model, raise plan, and public materials in one pass, so the team walks in with a raise plan and out with the route to take to counsel, the gaps that would stall the offering, and the steps to close them.

Book a token fundraising fit assessment with TokenMinds.

FAQs

What is the SEC’s Regulation Crypto Assets, and does it apply to my company?
Regulation Crypto Assets is a set of token offering rules the SEC proposed on August 18, 2026. It creates two registration exemptions and a safe harbor. It applies only when a non-security crypto asset is the only asset in the investment contract. Tokenized equity and debt fall outside it.

Can my business raise up to $75 million with a token under the new SEC rules?
Not yet, because the rules are still a proposal. If adopted as proposed, Tier 2 would allow up to $75 million in 12 months. The issuer would need to be a US entity with audited financials, SEC qualification, and ongoing reports.

What disclosures does the SEC safe harbor require for a token sale?
The token sale disclosures come from the exemptions, not the safe harbor. Proposed Rule 103 sets the topics, from the token and its network to tokenomics, governance, and risks. The safe harbor itself requires a Form TR certification with a supporting analysis.