Safe harbor for crypto startups: Faster financing, weaker protection?

Washington is gradually advancing a rules-based token issuance path

The U.S. Securities and Exchange Commission (SEC) issued the Tokens Safe Harbor Proposal 3.0 to create a time-limited exemption for certain token issuance under Rule 195, provided that information disclosure requirements are met and online tokens are expected to reach a "token maturity" status within three years. Verified facts: The draft also excludes specific token types, including those that are regularly repurchased and destroyed at a fixed proportion of the profits of centralized enterprises, thereby narrowing the scope of eligible token designs.

Core conclusion: A safe harbor with carefully set borders may attract U.S. cryptocurrency financing activities back ashore and improve the level of basic information disclosure. But if market participants interpret narrow exemptions as broad licenses, there is a risk of weakening the regulatory barrier. The real urgency of this issue stems from both procedural advances in Washington and clear evidence that current token issuance mechanisms often raise funds quickly but deliver meager returns to public buyers.

Verified Facts

The SEC's broader "crypto asset regulation" package, including the Safe Harbor Framework, entered the White House review stage in early April 2026, a necessary step for the Office of Information and Regulatory Affairs (OIRA) before the plan is announced in the Federal Register. The agency's unified agenda shows that the formulation of rules for relevant crypto assets is in the "proposed rules" stage in 2026, including RIN 3235-AN38 and related items. Independent market data further highlights the urgency: In 2025, of the 118 coin offerings tracked, as of December 20, 84.7% were trading at prices below their TGE (token generation event) valuations, and the median fully diluted valuation fell by approximately 71%.

Industry Feedback and Regulatory Tensions

Industry feedback submitted to the SEC highlights this tension. Facts verified: The Andreessen Horowitz Foundation urges narrow safe harbor paths tailored to airdrops and incentive programs to avoid excluding U.S. users or relying on temporary relief measures. Coin Center advocates a forward-looking "notices and comments" rule development process rather than optional no-objection letters or exemption relief. Trade groups such as SIFMA and Fidelity have warned the agency that core registration and market structure safeguards for tokenized markets should be retained.

Recent changes in the SEC process

Verified fact: Safe Harbor is part of the SEC's broader rulemaking package, which was submitted to the White House OIRA for review in early April 2026 and appears in the "proposed rules" stage of the SEC's 2026 unified agenda. This procedural step is the gateway to public notices, release of draft texts and comment periods. Although it does not predict the final result, it shows that an internal consensus has been reached to formally disclose the proposal.

At the same time, the text of the Tokens Safe Harbor Proposal 3.0 circulated within the SEC's Cryptography Task Force describes how Rule 195 works in practice. Verified facts: The framework covers "qualifying transactions," requires disclosure of information, and anchors a three-year path to "token maturity." It also proposes matching exemptions under the Exchange Act for the definitions of "exchange","broker" and "dealer", and tailor-made Investment Company Act exemptions for specific "autonomous systems" that rely on Rule 195.

Current status of token issuance revealed by recent data

Verified facts: Memento Research tracked 118 token generation events in 2025. As of December 20, 2025, 84.7% of token trading prices were below their issuance valuation, and the median fully diluted valuation fell by approximately 71%.

Corollary: If most tokens perform poorly shortly after raising, then the current mechanisms governing public token sales, while effective at rapid capital formation, deliver poor results for late buyers. Opinion: This combination reinforces the case for a structured, time-bound disclosure system that forces teams to deliver truly functional results, not just distribution mechanisms.

How Rule 195 is reshaping the U.S. token financing landscape

Verified facts: Rule 195 will be an exemption from "qualifying transactions" under the Securities Act, provided that information disclosure requirements are met and there is a good faith commitment to "token maturity" within three years. The text intentionally excludes some token designs, such as those that are periodically "bought back and destroyed" at a fixed percentage of centralized corporate profits.

Corollary: For founders whose tokens are used to facilitate access to networks or consumer applications, a time-limited exemption, provided that information disclosure and design standards are met, reduces the legal friction of involving U.S. participants at the time of issuance. A clear "mature" endpoint may also reduce the ambiguity about when tokens will no longer rely on management efforts and begin to operate like product rights.

Opinion: The most beneficial effect is to create competitive pressure on distribution strategies. With public disclosure systems and timetables for achieving functionality or decentralization, teams must deliver and document progress, rather than just create scarcity. If safe harbors remain narrow and effectively implemented, low-quality financialization designs should be excluded from their scope.

Impact of matching exemptions on market structure

Verified facts: The package includes draft exemptions from the Exchange Act covering when token activity triggers "exchange","broker" or "dealer" status, as well as exemptions under the Investment Company Act for specific "autonomous systems" that rely on Rule 195.

Corollary: If properly calibrated, these parts allow token networks and service providers to interact during the safe harbor window without having to include all touchfronts in traditional registration categories. This may improve liquidity and user access during the build phase, especially when third parties are able to provide routing, listing or custody services for covered assets without triggering full dealer or exchange obligations.

Opinion: This is the place where the risk of "thinning regulatory barriers" is highest. Narrow, activity-specific relief measures may smooth critical access channels. But if definitions are excessively relaxed or enforcement is inconsistent, intermediaries may restructure around exemptions rather than compliance, recreating the mismatch that plagued early token markets.

Memento Research Chart: The proportion of coins issued in the 2025 era is lower than TGE valuation (84.7%, data as of December 20, 2025)

Why safe harbors may weaken regulatory barriers

Verified facts: Public comments filed with the SEC both show support for clear rules and insist on traditional protections. Coin Center advocates rulemaking through "notices and comments" to avoid selective remedies for fragmentation. Trade groups such as SIFMA and Fidelity Investments have called on the SEC to retain core market structure safeguards. In contrast, the A16Z seeks to create narrow safe havens for airdrops and incentives.

Corollary: Safe harbors may be misinterpreted as authorization of riskier distribution mechanisms, especially as incentives for retail surge during a looser window. Combined with the poor performance record of coin issuance in the 2025s, the risk is to create a faster conveyor belt that accelerates the emergence of issuance projects that have failed to transition from speculation to available networks.

Verified facts: The scope of the proposal is deliberately narrow and is subject to design characteristics and disclosure; many tokenized financing structures will still be outside the scope of this exemption. Opinion: This guardrail is crucial. The more the final rule insists on requiring functional access to tokens and demonstrated decentralization or practicality when mature, the more difficult it will be for pseudo-equity tokens to muddle through.

What would confirm or weaken this argument

OIRA results and Federal Register publication: date of publication, scope of notification, and whether crypto-asset-related RIN is advanced as a whole or in a step-by-step manner. Verified facts: OIRA review is a prerequisite for publication in the Federal Register.

Final text of Rule 195: definition of "qualified transaction", information disclosure requirements, three-year "token maturity" path, and clear exclusions such as a profit-linked "repurchase and destruction" design.

Matching exemptions: How narrow is the scope of relief measures under the Exchange Act and the Investment Company Act for exchanges, brokers, dealers and "autonomous systems"?

Issuer behavior: The proportion of inclusive U.S. issuance that opt-in to join Safe Harbor, the quality and comparability of information disclosure, and whether the team publishes a credible mature roadmap.

Intermediaries 'response: Exchange venues, custodians and brokers' policy updates for Rule 195 coverage of tokens; whether they rely on exemptions or maintain existing registration paths.

Market results: Differences in the post-issuance performance of safe harbor tokens and uncovered tokens, and evidence that the network achieved functional milestones before the end of the three-year window period.

Enforcement and interpretation actions: Clear guidance on abuse of safe harbors and signals that tokens with similar profits or designs that are tested out will face traditional registration or enforcement.

Editor's Conclusion

A narrow, information-focused safe harbor could allow U.S. token financing to advance faster while avoiding repeating the mistakes of past cycles. Data supports change, and rule texts emphasize limitations. Whether the market can have both depends on how tight the final exemptions are and how faithfully they are enforced.