The SEC proposed its first crypto-native rulebook today (“Regulation Crypto Assets”).
My feed is full of takes saying you can now tokenize your company and raise $75M from retail. That is not what happened. You still cannot sell equity as a token under these rules.
What actually happened is bigger for web3 and smaller for corporate finance: memecoins, utility tokens, and NFT projects can now legally promise future work. The “we will build X” promise that powered every token launch since 2017 (and that the SEC treated as a crime) now has a legal path.
Let me explain.
How it worked before
There was one test: Howey, from a 1946 case about orange groves. If you sold something and promised to do work that would make it more valuable, you sold a security. No registration path existed that fit tokens, so every launch that made promises was illegal by default.
And you found out after the fact. The SEC gave no rules upfront. It sued you years later and the courts decided. Telegram raised $1.7B, got sued, and returned the money. Hundreds of smaller projects got the same treatment. The rational move was to launch offshore and block US users, which is exactly what everyone did.
What changed in March
Earlier this year the SEC (jointly with the CFTC) published a token taxonomy. Five buckets:
Digital commodities (network tokens like ETH, SOL)
Digital collectibles (memecoins, NFTs)
Digital tools (utility assets)
Payment stablecoins (under the GENIUS Act)
Digital securities (tokenized stocks and bonds)
Buckets 1 through 4 are not securities. Bucket 5 is.
But here’s the counterintuitive part: the bucket describes the asset, not the sale. A memecoin is not a security. But if you sell that memecoin while promising “I will build the community, do buybacks, get listings,” the sale becomes an investment contract. A securities transaction wrapping a non-security asset. So even after March, the promises stayed illegal without registration. And there was still no registration that worked.
What changed today
Today’s proposal fixes that last piece. It gives you three ways to make those promises legally:
Startup exemption. Raise up to $5M over four years, one time. Requires plain-language disclosure to buyers (think a standardized whitepaper: what you are building, who the team is, how the token works).
Fundraising exemption. Raise up to $75M in each 12-month period. Same disclosure, plus financial statements and ongoing reporting.
An exit. Once you finish (or permanently stop) the work you promised, you certify it to the SEC and the token stops being subject to an investment contract. It leaves securities law. Resales of tokens under this framework also get relief, including preemption of state-by-state securities registration.
Read that list again. It legalizes the core behavior of web3 fundraising: sell tokens, promise to build, build, and then let the token trade freely once the network stands on its own.
What did NOT change
You still cannot say “this token is 10% of my company.” A token that carries equity or profit share IS a stock (bucket 5), and none of this applies to it. Tokenized securities are getting their own separate framework (the “innovation exemption” the SEC has been signaling all year), and it has not shipped yet. If your plan is tokenized equity, nothing changed for you today.
What becomes possible
The headline use case is network tokens. Launching a new L1, a DeFi protocol, or a DePIN network? You can now sell part of the token supply to fund development, in the US, to US buyers, and say out loud that you will build the network. That was the entire ICO model. It funded Ethereum. It has been illegal in the US for eight years.
Also newly viable: memecoins where the creator commits to community work, and NFT collections that promise events, marketing, or a roadmap. All the promises projects were making anyway, now with a legal wrapper.
This is not the Wild West
Some people are calling this reckless. Time will tell, but note what the rule actually demands. Disclosures are mandatory and standardized: what you are building, the token economics, the team, and at the $75M tier, audited financials with ongoing reporting. Exceed the caps, skip the filings, or lie in the disclosures and you lose the exemption entirely. Then you face the full securities laws, plus fraud liability. A rug pull under this regime is not a gray area. It is documented, filed, prosecutable fraud.
My 2c: this adds more protection than exists today, because today the same behavior happens offshore with zero disclosure and zero recourse.
One caveat: this is a proposal, not a final rule. 60 days of public comment, final adoption expected in 2027. But the direction is set, and the market that emerges from it (compliant US token launches) is one everyone building payments and wallet infrastructure should be paying attention to.
