U.S. SEC Floats Rules to Revive Public Token Offerings as ICO Appetite Fades

Aug. 28 — The U.S. Securities and Exchange Commission has unveiled a proposal aimed at reopening public token offerings to U.S. investors, according to Bloomberg. Under the draft framework, crypto startups could raise up to $5 million, while larger projects may raise as much as $75 million per year without going through full SEC registration. Issuers would be required to provide specified disclosures, a shift expected to increase compliance costs. The SEC's approach to secondary-market trading after issuance remains complicated. The proposal also introduces a pathway for the investment contract associated with a token to end once an issuer has completed its managerial obligations or permanently stopped performing them, rather than keeping the contract perpetually attached to the token. Even with the regulatory opening, demand for ICO-style fundraising has weakened markedly. Speculative flows are concentrating in Bitcoin, large-cap tokens, perpetual futures, prediction markets and AI-themed equities. Crypto VC-backed token financings have declined, and some major venture firms are broadening into AI, robotics and other sectors. At the market's peak in January 2018, ICOs raised roughly $3 billion in a single month. Dragonfly partner Tom Schmidt called the SEC proposal "clearly better than nothing," while pointing to Congress' stalled CLARITY bill as a more pressing issue. GSR analyst Carlos Guzman said ICOs in 2026 will not resemble 2018, arguing that the period of raising capital solely on whitepapers and big visions is over.