SEC Moves to Ease ICO Rules, but Weak Investor Demand May Limit Fundraising

The US Securities and Exchange Commission is moving to ease rules for initial coin offerings, though it remains unclear whether the changes will bring in fresh capital as investor interest has cooled sharply since the last ICO boom.

Bloomberg reported on August 27 that the SEC’s proposed exemptive framework for crypto token issuance, released this month, would allow qualifying projects to sell tokens publicly without full securities registration. Early-stage projects could raise as much as $5 million a year, while larger projects could raise up to $75 million.

The proposal marks a significant shift from the SEC’s hard-line regulatory stance following the 2017 ICO boom. But market conditions have changed markedly since then. Capital has shifted to major cryptocurrencies such as Bitcoin, as well as perpetual futures and prediction markets. Token investments by crypto venture capital firms have also fallen sharply since 2025.

Tom Schmidt, a general partner at Dragonfly, said the proposal would have been more useful if it had come out a few years earlier. He added that market-structure issues the CLARITY Act is meant to address are now a more urgent priority than fundraising.

The industry also sees value in the proposal because it could reduce regulatory uncertainty. The SEC plan includes a provision that would allow the investment-contract relationship formed at the time of a token sale to end if an issuer completes the development and management activities it promised, or permanently stops them.

Carlos Guzman, a research analyst at GSR, said ICOs in 2026 are different from those in 2018. The era of raising money with little more than a white paper and an idea is over.