The US Securities and Exchange Commission has proposed a regulatory framework that would have been unthinkable three years ago: a structured path allowing crypto projects to sell tokens to the public without going through the full gauntlet of securities registration.

The proposal, named Regulation Crypto Assets, or Reg CA, was released on August 18 and represents the most significant shift in how the United States treats token fundraising since the agency spent years systematically dismantling the initial coin offering model that defined 2017's crypto boom.

What Reg CA actually does

The framework creates two distinct exemptions for projects looking to raise capital through token sales.

The first is a one-time "startup exemption" that lets projects raise up to $5 million over a maximum of four years.

The second, more ambitious path is a recurring "fundraising exemption" that permits raising up to $75 million within any 12-month period, with layered disclosure requirements and audited financial statements for larger raises.

Perhaps the most consequential piece of the proposal is a conditional safe harbor. Under this provision, certain crypto assets could be reclassified as non-securities once the original issuer's managerial efforts are completed or discontinued.

From enforcement to enablement

After the 2017 ICO boom, the SEC responded with a years-long enforcement campaign. Dozens of projects were hit with lawsuits, cease-and-desist orders, and penalty actions.

Reg CA builds on interpretive guidance the SEC issued in March 2026 that began classifying crypto assets more precisely. The new proposal takes that classification work and attaches actionable fundraising pathways to it.

The framework also arrives after legislative efforts stalled in Congress. The CLARITY Act, which would have established similar distinctions between securities and non-securities in the crypto context, failed to advance through the legislative process.

For projects, the significance is not just that token sales may become possible again, but that they would do so under explicit federal guardrails rather than through the uncertainty that has surrounded public offerings for years. For the wider market, the proposal suggests the SEC is trying to shift from a mainly punitive posture to a rule-based system that can distinguish between smaller early-stage raises and larger offerings that require more robust disclosures.

ICO 2.0, with guardrails

Industry observers have started calling the potential outcome "ICO 2.0," though the comparison only goes so far. Reg CA's disclosure requirements, including principles-based reporting and antifraud protections, are designed to prevent a repeat of 2017's free-for-all.

The tiered structure matters here. A project raising $2 million under the startup exemption faces different requirements than one seeking $75 million under the fundraising exemption. Larger raises demand audited financials and more detailed operational disclosures.

That structure also sets up the next phase of scrutiny: whether issuers can use the exemptions without blurring the line between capital raising and public distribution of securities. The public comment period runs through October 20, 2026, giving market participants and policymakers a window to weigh the details before any final rulemaking.