SEC new rules: Crypto projects can raise $75 million without full registration, but no one cares

Eight years after the ICO boom, regulators have launched a path that the market has long abandoned. The money it is trying to regulate is now flowing through channels not touched by the proposal.

Abstract

The U.S. Securities and Exchange Commission (SEC) has proposed a framework to allow crypto projects to raise up to US$75 million annually through public token sales through expanded versions of existing A+ exemptions without having to complete securities registrations.

The proposal came about eight years after the 2017 - 2018 ICO wave, which was the trigger for the proposal. During that wave, projects raised more than $20 billion through unregistered token sales, and the SEC began systematically enforcing the law.

By 2026, capital formation in the crypto field has almost completely shifted to mechanisms not covered by the proposal: emoji coin launch platforms, airdrops, points plans, liquidity token listings, and venture capital rounds through simple agreements for future tokens.

In the same week that the SEC issued the proposal, Pump.fun recorded the second-highest single-day revenue in its history, with capital formed in 24 hours exceeding the total amount raised by most ICOs during the entire event.

The framework requires audited financial statements, ongoing reporting obligations, and a two-year path to full registration. These requirements will disqualify the vast majority of projects currently raising funds in the crypto market.

The SEC has spent nearly a decade deciding how to make crypto projects legally raise funds. When it finally announced the answer, the industry was long gone. The proposal is technically sound and institutionally rational, but it is almost certainly irrelevant to the markets it claims to serve.

Proposal actual content

This framework extends the existing A+ exemption rule, which allows small companies to raise up to $75 million annually from the public with lighter disclosure requirements than a full S-1 registration. The SEC has added provisions for specific risks to tokens, smart contract audits, and wallet custody disclosures for specific versions of cryptocurrencies.

Projects using the framework require filing an issue circular on Form 1-A to the SEC, providing audited financial statements, and undertaking ongoing reporting obligations, including semi-annual updates and material event disclosures. Two years after the compliance report, the project will transition to full registration in accordance with the Securities Exchange Act.

The $75 million cap is for each issuer per year. Secondary transactions will be allowed on registered alternative trading systems, but there are currently no major cryptocurrency transactions so such systems operate. The proposal explicitly excludes governance tokens that are used only as a means of payment or have no profit expectation, and these two types of tokens cover most of the tokens in actual transactions.

The filing process itself is not simple. Form 1-A requires detailed disclosure of the project's business plan, team background, use of funds, risk factors, and specific rights conferred by the tokens. The SEC reviews each document before approving it, a process that typically takes three to six months for traditional A+ issuance. For a crypto project operating in a market where narratives change from week to week and opportunities are fleeting, a six-month review period is tantamount to a death sentence.

Why timing matters

The ICO boom peaked in January 2018, when projects were able to raise hundreds of millions of dollars based solely on white papers and Ethereum smart contracts. EOS raised $4.1 billion. Telegram raised $1.7 billion. Filecoin raised $257 million in 30 minutes. In 2017 and 2018, the total exceeded $20 billion, but hardly a penny was raised through the regulatory framework.

The SEC's response is to enforce, not to make rules. Between 2018 and 2025, the agency launched more than 100 enforcement actions against token issuers, collecting billions of dollars in fines through settlements. EOS paid US$24 million. Telegram refunded $1.2 billion and paid $18.5 million in fines. Block.one, Kik, LBRY, Ripple and dozens of smaller projects have gone through years of legal battles, and these lawsuits have established what the SEC could have established by setting clear rules in the first place.

This practice of enforcing laws first and then enacting laws has created a regulatory desert. There is no clear path for projects that want to raise funds legally. Projects that raise funds illegally face law enforcement risks years after the sale is completed, when the funds have long been spent and the team is often disbanded. Neither outcome benefited investors.

The Clarity Act lost its legislative window in August 2026, and the odds on Polymarket for its passage plummeted from 82% to 16%. The Genius Act also missed its legal deadline by four months. In the absence of legislation, the SEC is now developing rules that Congress failed to pass.

This order is important because it reveals the actual function of the proposal. This is not a growth plan designed to encourage crypto capital formation. This is a regulatory enclosure that attempts to establish the SEC's jurisdiction over token offerings before another agency or legislative framework occupies the field.

How crypto capital is actually formed today

This is part that competitors cannot write about because it needs to paint a panoramic picture of how the project will raise funds in 2026 and compare it to what the SEC framework will cover.

emoticons launching platform. The same week that the SEC issued its proposal, Pump.fun on Solana posted the second-highest single-day revenue in its history. The platform allows anyone to create and issue tokens in minutes, with funds flowing through a joint curve of algorithmically priced tokens. There are no white papers, no team disclosures, no audited financial statements. The new Solana emoticons $fone had a market value of US$35 million on its first day of launch. None of these activities are within the SEC's framework, as emoji explicitly denies any profit expectations related to the issuer's efforts.

The scale of launch platform activities far exceeds what can be generated by the A+ regulations. Pump.fun and its competing platforms will process tens of thousands of token issues per month in 2025 and 2026. Four.Meme on the BNB chain briefly surpassed Pump.fun in terms of daily income, proving that this model can be replicated on different chains. The total capital flowing on these platforms per month exceeds the total amount promoted by Regulation A+ under all asset classes throughout its 11-year history.

Airdrop and points plan. Projects like Hyperliquid, which hit a record high of more than $86 this week, distribute tokens through activity-based airdrops to reward users for trading on the platform. Users receive tokens for past behavior rather than using capital in exchange for them. The SEC's framework governs sales, not distributions, leaving the fastest-growing capital formation mechanism untouched.

The airdrop model has become the dominant market entry strategy for the new agreement. Blur, Eigen, Ethena, Jupiter and dozens of other projects use points plans, which ultimately translate into token distribution. In 2025 alone, the total value distributed through airdrops exceeded $10 billion, more than 130 times the A+ annual cap of $75 million.

Conduct a venture capital round through SAFT. Serious infrastructure projects still raise funds through Future Tokens Simple Agreements, a private equity vehicle sold to qualified investors under Regulation D. These rounds are already legal and common, and do not require a new public release framework. In addition to more paperwork, more SEC supervision and a longer timeline, the $75 million Regulation A+ path does not provide anything that the $50 million Regulation D round does not.

According to Galaxy Research, the total amount of venture capital investment in the crypto field will be approximately US$13.7 billion in 2025, and a similar figure is expected to reach in 2026. Almost all funds flow through Regulation D exemptions or offshore structures. Projects that require capital have found capital. The SEC proposal provides a slower, more expensive alternative, and existing channels work very well.

Liquidity tokens are listed. Many projects skip financing entirely, launch tokens directly on decentralized exchanges, and establish price discovery through liquidity pools on Uniswap, Raydium, or Orca. There is no need for permission to go public. Capital comes from traders, not investors, a distinction that is legally important, even if it is economically irrelevant.

Compliance costing

This proposal requires audited financial statements. For a crypto startup, obtaining an audit from a company willing to express an opinion on a token project costs between $150,000 and $500,000 per year. Major accounting firms, such as Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG, have been cautious about the crypto audit business, leaving most projects relying on smaller companies with limited blockchain expertise.

The filing of Form 1-A itself requires legal counsel familiar with securities law and token mechanisms. Specialized crypto securities lawyers charge $500 to $1200 per hour. A complete A+ filing, including issuance circulars, legal opinions and SEC review process, costs between $200,000 and $500,000 in legal fees alone.

Coupled with ongoing reporting obligations, including semi-annual updates, material event disclosures, and final full Exchange Act reporting two years later, a project using this framework would spend approximately US$400,000 to US$1 million per year for compliance before writing any code.

For a project that raises US$75 million, these costs represent 0.5% to 1.3% of the amount raised, which is manageable. But projects that raise $75 million are already being privately held through Regulation D, at a fraction of the cost and with fewer ongoing obligations. The projects that would benefit most from the public offering path, early teams with limited capital and wanting to sell tokens to retail investors, are precisely those who cannot afford the compliance burden.

The two-year path to full registration adds additional obstacles. A project that submits an application under Regulation A+ in 2027 will face all Exchange Act reporting requirements by 2029, including quarterly filings, annual reports, proxy statements and insider trading restrictions. In an industry where the average project life is in months and the median token loses 80% of its value within one year of listing, committing to four years of SEC supervision is a gamble few founders would voluntarily make.

Who really benefits

The proposal serves three groups, none of which are the crypto-native projects the proposal purports to target.

First, there are traditional financial institutions that want to issue tokenized securities. Banks, asset management companies and broker-dealers already have compliance infrastructure, audit relationships and legal teams. For them, Regulation A+ token issuance is just a small extension of their existing business. JPMorgan Chase's Kinexys platform, Goldman Sachs's tokenized money market funds, and Franklin Templeton's on-chain treasury funds can all issue tokens under this framework without substantially changing their cost structures. The proposal basically codifies what they are already planning to do.

Secondly, the SEC itself. By establishing a regulatory path that requires filing, disclosure and ultimately full registration, the agency has established jurisdiction over a class of assets that are inconsistent in court classifications. Every project filed under this framework verifies the SEC's authority over tokens, regardless of whether the framework produces meaningful applications. In Washington, the size of an agency's territory depends on the number of entities under its jurisdiction, and the proposal expands the SEC's jurisdiction.

Third, it is compliance service providers. Law firms, audit firms and registry transfer agencies will receive new revenue streams from token issuers who navigate this framework. The issuance of Revolut stablecoins and the entry of similar institutions into the crypto space have expanded the demand for crypto compliance services. The A+ regulatory framework will further expand this need and create a recurring revenue base for companies that specialize in SEC filings.

Precedent issues

The A+ Regulations have existed under Chapter 4 of the Employment Act since 2015. In its traditional form, about 800 companies have used it, raising a total of $8 billion over 11 years. The vast majority of these issues are aimed at small companies in the real estate, marijuana and consumer goods sectors. Few companies have raised the full amount of $75 million, with the median amount raised closer to $5 million to $15 million.

In comparison, according to CoinGecko, in 2024 alone, crypto projects raised $7.5 billion through token sales, with almost no penny being conducted through SEC-regulated channels. The total output of the A+ regulation in all industries over the past 11 years barely exceeded the amount of money the crypto industry has raised through unregulated mechanisms in one year.

Adoption rates illustrate the problem. Even in traditional capital markets, Rule A+ is a niche product for companies that are too small to launch an IPO and too retail oriented to use Rule D purely. IPOs, Regulation D private placements, direct listings and SPACs handle the vast majority of capital formation. There is no reason to expect the adoption rate of the crypto industry to exceed that of traditional markets, and there are several reasons to expect it to be lower, including the existence of permission-free alternatives that do not exist in traditional finance.

$TRUMP token comparison

$TRUMP emoticons raised capital through trading activities in the first week of listing exceeds the amount raised during the entire event period for most Regulation A+ issues. It did not issue circulars, had no audited financial statements, and did not interact with the SEC's filing system.

This comparison is not entirely fair.$ The vast majority of TRUMP tokens and the thousands of emoji coins released every day on platforms such as Pump.fun are speculative, have short lives, and have no intention of building. But this is the key. The SEC's proposal targets a type of activity that seeks to raise money from the public through appropriate disclosure, which has been abandoned by the market in favor of mechanisms that operate completely outside regulatory boundaries.

The market has made a choice. It has chosen speed over security, no licensing over process, and emoticons over fundamentals. Whether this is good for investors is debatable. But whether the SEC's proposal can change that is beyond debate.

What can prove this analysis wrong

There are two situations that can make an SEC proposal important.

First, if a major crypto project, one with a well-known brand and a large user base, submits an application under the framework and successfully raises US$75 million, this will verify that the path is a real alternative to Regulation D and offshore token sales. A first successful filing would set a precedent and could attract followers who view regulatory clarity as a competitive advantage for serving institutions 'capital.

Second, if the SEC starts enforcing airdrops, points programs and launch platform mechanisms, projects currently using these channels will require a legal alternative. The A+ regulatory framework will become important not because it is attractive, but because all other paths are blocked. The SEC has shown a willingness to expand the scope of enforcement in the past, and it is not impossible for emoji launch platforms to face enforcement risks in the future.

A third possibility is for foreign regulators to adopt a similar framework that requires reciprocal compliance to enter the U.S. market. If the European Union, the United Kingdom or Singapore requires A+ level disclosure for tokens sold to their citizens, projects targeting a global audience will face compliance pressure from multiple jurisdictions.

Points of concern

The filing activity in the first 90 days. The review period will last until November 2026. If no project submits a Form 1-A within three months of the final rule being announced, the framework is effectively dead. Pay attention to announcements from tokenized securities platforms or institutional issuers, who may be pioneers.

SEC enforcement of airdrops and launch platforms. Any enforcement action against large airdrops or emoticons launch platforms will immediately change the consideration of projects choosing between regulated and unregulated capital formation. The proposal becomes important only if the alternative becomes dangerous.

Congress's reaction. If the Clarification Act or similar bill is resurrected at the next session, it could completely replace the SEC's framework. Legislative activity in the first quarter of 2027 will determine whether the A+ path has a future or whether it becomes another abandoned regulatory experiment.

Institutional adoption of tokenized securities. Banks and asset management companies issue tokenized bonds, funds or equity under this framework, which will generate transaction volume even if crypto-native projects ignore it. Focus on filings of Goldman Sachs, JPMorgan Chase or BlackRock affiliates as a indicator of institutional interest.

Pump.fun and launch platform revenue trends. If launch platform revenue declines due to market conditions or regulatory pressures, the pool of capital seeking a home will expand and the regulated path will become more attractive by default. Conversely, if trading volume on launch platforms continues to grow, the SEC's framework will become increasingly irrelevant.

What is the SEC's new cryptocurrency token sale proposal?

The SEC is proposing to allow crypto projects to use the expanded A+ Regulation exemption to raise up to $75 million annually through public token sales. Projects require disclosure filings, audited financial statements, and transition to full SEC registration two years after compliance reporting.

How much money can crypto projects raise under this framework?

The cap is $75 million per issuer per year. Secondary transactions will be allowed to take place on registered alternative trading systems. The filing and review process typically takes three to six months.

Why is the SEC proposing this now?

Congress failed to pass comprehensive encryption legislation. The Clarity Act lost its window, and the Genius Act missed its deadline. The SEC is making rules through its existing regulatory powers because the legislative path is blocked and it wants to establish jurisdiction before another agency occupies the field.

How does this compare to the way crypto projects actually raise money?

In 2026, most crypto capital formation will take place through emoji coin launch platforms, airdrops, points programs, and venture capital rounds using SAFT under Regulation D. None of these mechanisms is covered by the SEC proposal. Airdrops alone will distribute more than $10 billion in 2025.

What is the cost of complying with the proposal?

Audited financial statements, legal review, Form 1-A filings, and ongoing reporting obligations are estimated to require US$400,000 to US$1 million per year. A project that raises $75 million could absorb the cost. Early teams that raised smaller amounts faced compliance costs that were disproportionate to the amount they raised.

Will the emoticons launch platform be affected?

Will not be directly affected. emoji coins typically deny any profit expectations related to the issuer's efforts, which puts them outside the securities framework. The proposal governs the sale of tokens with investment characteristics, rather than speculatively traded tokens issued on unlicensed platforms.

Who will actually use this framework?

Traditional financial institutions issuing tokenized securities are the most likely adopters. Banks, asset management companies and broker-dealers already have the compliance infrastructure, audit relationships and legal teams needed to absorb these requirements. Crypto-native projects have cheaper, faster, and less restrictive alternatives available.

Is this good or bad for the crypto market?

This is educational analysis, not investment advice. The framework provides a legal path that did not exist before, which has structural positive implications for projects that want to gain regulatory certainty. Whether it produces meaningful applications depends on enforcement of unregulated alternatives and the willingness of existing agencies to issue tokens through the SEC.