SEC Targets Token Issuance With New Crypto Rules as Congress Stalls on CLARITY

The U.S. Securities and Exchange Commission is preparing for one of its most consequential crypto rulemaking discussions of 2026. On August 14, the SEC will hold an open meeting to consider whether to release proposed rules creating a tailored offering regime for certain investment contracts involving crypto assets. The proposal has not yet been published, but SEC Chair Paul Atkins has already outlined a framework that could include special fundraising exemptions and a safe harbor designed to clarify when a token-related investment contract comes to an end.

 

The timing matters. Congress has made progress on the Digital Asset Market Clarity Act, or CLARITY Act, but a key Senate procedural vote has been pushed until lawmakers return from the August recess in September. That leaves the SEC moving ahead on an issue the crypto industry has debated for years: how token projects can legally raise capital without forcing every offering into a traditional securities framework.

Why the SEC Is Moving on Token Issuance Now

For years, U.S. crypto projects have faced uncertainty over how federal securities laws apply to token launches. The central problem has not simply been whether a crypto asset can be called a security. It has been whether the transaction used to sell that asset—particularly when buyers are funding a development team and expecting the network to grow—creates an investment contract subject to securities law. In March 2026, the SEC formally clarified that a crypto asset that is not itself a security can still become subject to an investment contract, and that such a relationship can later end.

 

That interpretation laid the foundation for what Atkins has described as “Regulation Crypto Assets.” The SEC chair subsequently outlined three possible regulatory tools: a startup exemption, a broader fundraising exemption and an investment contract safe harbor. The August 14 meeting will determine whether the Commission releases an actual proposed rule built around a tailored offering regime.

 

The congressional backdrop makes that work more important, but it is important not to reverse the chronology. The SEC did not suddenly create this plan because the CLARITY Act slowed down. The agency had already been developing it. What congressional delays have done is increase the potential importance of the SEC framework as an interim route toward clearer token-issuance rules.

What the SEC Is Actually Trying to Fix

A Token Does Not Always Equal a Security

Imagine a startup developing a blockchain network and selling XYZ tokens before the network is fully operational. Buyers contribute capital partly because they expect the development team to build the protocol, attract users, improve the technology and ultimately create demand for XYZ. Even if the XYZ token is not inherently a security, the arrangement surrounding its sale may still constitute an investment contract.

 

The SEC's March interpretation specifically acknowledged this distinction, stating that a non-security crypto asset can become subject to an investment contract and later cease to be subject to that contract. That matters because it moves the regulatory discussion away from the simplistic question of whether a token is “a security forever.”

 

Until now, many projects have effectively faced an uncomfortable choice: attempt to fit an emerging token network into securities rules developed primarily for conventional capital markets, rely on existing exemptions that may not fit the project's structure, restrict U.S. participation or operate with substantial legal uncertainty. Regulation Crypto could introduce another option—a crypto-specific path for capital formation.

The Three-Part Framework That Could Reshape Token Launches

Atkins' March speech gives the clearest indication of what the SEC may consider. None of the numbers below should be treated as final terms until the Commission releases the actual proposal, but they show the architecture regulators have been discussing.

Startup Exemption

The first concept is a time-limited startup exemption. Atkins suggested that such an exemption could provide developers with a regulatory runway of up to roughly four years while they work toward network maturity. He also floated an example fundraising limit of approximately $5 million during that period. Projects using the exemption could be required to notify the SEC and provide principles-based disclosures similar in some respects to the information commonly found in crypto white papers.

 

The purpose is not to create a regulation-free launch zone. Instead, it would recognize that an early-stage blockchain network looks very different from a mature public company. A small protocol experimenting with decentralized infrastructure may need investor protection and disclosure requirements without necessarily needing the entire regulatory apparatus associated with a traditional registered securities offering.

Fundraising Exemption

The second proposal could be considerably larger. Atkins has suggested a fundraising exemption under which eligible entrepreneurs might raise as much as approximately $75 million during a 12-month period while retaining access to other securities-law exemptions. Issuers could be required to submit information about the investment contract and underlying crypto asset, their financial condition and financial statements.

 

If adopted in a workable form, that would create something closer to a regulated token offering. Instead of choosing between full registration and a legally uncertain token sale, projects could potentially raise significant capital through a framework explicitly designed for crypto networks.

Investment Contract Safe Harbor

The third component may ultimately be the most significant. Atkins has proposed a safe harbor that could apply once an issuer has completed—or permanently stopped—the essential managerial efforts it promised to perform under the original investment contract. The objective would be a more rules-based standard for determining when the underlying crypto asset is no longer subject to federal securities laws because of that earlier contractual relationship.

 

That changes the regulatory question from merely “How can a token be sold?” to something much broader: What is the regulatory lifecycle of a token-funded network?

Why the Safe Harbor Could Matter More Than the $75M Headline

A $75 million fundraising threshold will naturally attract attention, but the safe harbor could have a much deeper effect on crypto markets.

 

Consider the lifecycle of a typical token-based network:

Token launch → team-led development → investment-contract obligations → network maturity → essential managerial efforts end → potential exit from investment-contract treatment

 

The key issue is the transition in the middle. A project can begin with a recognizable company or development team whose efforts are crucial to the network. Years later, that network may have independent validators, third-party developers, open-source software, community governance and an economic system that no longer depends on the original issuer in the same way.

 

The SEC's March interpretation explicitly recognized that investment contracts can end. A safe harbor could transform that principle into a more predictable set of rules.

 

For market participants, the important question is therefore not only whether the original token sale involved a security. It is whether that legal status must remain attached indefinitely. If the SEC establishes objective criteria around network maturity and the completion of essential managerial efforts, projects, exchanges, investors and developers may have greater certainty about when securities-law obligations end.

 

That could also matter for secondary markets. Exchanges have historically had to consider whether listing a particular token could expose them to securities-law obligations. A clearer endpoint for investment-contract treatment could reduce part of that uncertainty, although the actual significance will depend heavily on how the proposed rule handles resale, ongoing issuer involvement and secondary trading.

SEC Rules vs. the CLARITY Act: What Is the Difference?

The SEC's Regulation Crypto initiative and the CLARITY Act overlap in some areas, but they are not substitutes for one another. The SEC is an administrative agency operating under authority already granted by Congress. The CLARITY Act is legislation that could reshape the statutory framework itself.

The Senate version of the CLARITY Act is much broader. Reuters reported that the legislation addresses regulator jurisdiction, stablecoin rewards, anti-money-laundering obligations, decentralized finance and a separate fundraising exemption. The July Senate text would allow qualifying crypto companies to raise up to $50 million per year and as much as $200 million in total without full SEC registration—different from the illustrative $75 million annual figure Atkins has discussed for the SEC's own framework.

 

The distinction is crucial. The SEC can potentially build a bridge for token issuance, but Congress controls the broader architecture of U.S. crypto regulation. A comprehensive statute can determine which assets fall under SEC or CFTC jurisdiction and establish rules that an agency cannot simply create through its own interpretation of existing securities law.

Could This Bring Token Fundraising Back to the US?

Regulatory uncertainty has long shaped where crypto companies establish entities, conduct token sales and allow investor participation. When a project cannot predict whether its fundraising structure will lead to years of securities-law exposure, moving parts of its operations outside the United States can appear attractive. A tailored exemption could change that calculation by making the cost of U.S. compliance easier to estimate.