SEC Considers Rule for Crypto Startups to Raise Funds Without Token Registration

The U.S. Securities and Exchange Commission is preparing a potential lifeline for crypto startups: at an open meeting on Friday, Aug. 14 (10 a.m. ET), the agency will consider proposing rules that could allow certain digital-asset projects to raise capital without registering their tokens as securities. A Sunshine Act notice posted Aug. 10 says the release would create a tailored framework for specific digital-asset offerings. If opened for public comment, it would mark the SEC’s first permanent rule for the crypto sector—not another interpretive staff statement—giving the agency a more durable regulatory tool. The commission has not published fundraising thresholds or other specifics in the notice. The draft framework has been gestating for months under SEC Chair Paul Atkins’ “Regulation Crypto Assets” approach, which favors exemptions and safe harbors over enforcement actions. Atkins has previously described a startup exemption that could last “up to four years,” providing a regulatory runway for projects to develop and achieve decentralization before exiting SEC jurisdiction. The rulemaking appears aimed in part at filling the gap left by Congress. The Senate left for its August recess without advancing the Digital Asset Market Clarity Act, a bill intended to establish clearer legal guardrails for the U.S. crypto market. “We view this as the first of several rulemakings the SEC will undertake to provide regulatory certainty for crypto assets after the Senate failed before the August recess to advance the Clarity Act,” TD Cowen analyst Jaret Seiberg wrote after the notice. A formal rule would be harder to overturn than the stream of staff statements the SEC has issued this year—guidance that clarified the agency’s posture on staking, airdrops and mining but did not create binding, long-term obligations. A completed “Reg Crypto” regime would remain on the books beyond any single chair’s tenure (although Congress passing the Clarity Act would still be the most durable solution). The expected framework’s key trade-off is clear: projects could raise funds without securities registration, but only if founders step back from active control. In practice that creates an “escape hatch”—relief arrives once the developers are no longer engaged in managing the protocol. The SEC is also working other pieces of its crypto agenda, including a joint taxonomy with the Commodity Futures Trading Commission to divide regulatory territory. The Clarity Act still has a slim chance of action next month; prediction-market Myriad currently shows just 22% odds it will pass this year. Meanwhile, Atkins continues to push an innovation-exemption strategy and the long-promised safe harbor for startups—the product of staff work underway since spring. The commission’s meeting is open to the public on Aug. 14 at 10 a.m. ET. If the proposal advances to a formal rulemaking, it could reshape fundraising and compliance choices for U.S. crypto projects.