SEC cancels meeting on proposed crypto fundraising regime

The U.S. Securities and Exchange Commission canceled an open meeting scheduled for Friday that would have considered publishing a proposal for a crypto fundraising regime. The agency posted a notice on Aug. 13 giving no reason or replacement date. The agenda would have asked commissioners whether to publish a proposal for an offering regime covering certain investment contracts involving crypto assets. An affirmative vote would have opened a formal rulemaking process; any final adoption, effective date and ability for issuers to rely on a new exemption would have required later steps.

The cancellation delays publication of proposal text that might have clarified eligibility standards, required disclosures and resale limits. Existing securities law remains unchanged, and issuers must rely on current registration and exemption routes to raise funds for token development.

In March the SEC issued an interpretive release that distinguishes a crypto asset from the transaction in which it is sold. Under that view, a token that is not itself a security can still be offered as part of an investment contract when buyers invest in a common enterprise with a reasonable expectation of profits from the issuer’s managerial efforts. If an issuer completes the promised work or buyers can no longer reasonably expect those efforts, the token may trade apart from the original investment contract, but the initial offer and sale remain subject to registration or an available exemption.

Because compliance obligations attach to the initial fundraising transaction, teams that solicit funds to finance software development, network growth or management activity must use an existing registration or exemption at launch. Registered offerings carry no cap on the amount raised but require an effective registration statement before sales and ongoing public-company obligations. Rule 506(b) and 506(c) offer uncapped private-raising paths: 506(b) prohibits general solicitation and applies purchaser and disclosure conditions when non-accredited investors participate; 506(c) permits general solicitation but requires all purchasers to be accredited and reasonable steps to verify accreditation. Rule 504 generally covers raises up to $10 million in 12 months. Regulation Crowdfunding is limited to $5 million in 12 months and requires a registered broker-dealer or funding portal. Regulation A allows up to $20 million for Tier 1 or $75 million for Tier 2 in 12 months and requires SEC qualification. Regulation S applies to offers made outside the United States.

Token issuers also face crypto-specific disclosure questions that the SEC staff has said depend on material facts. Relevant topics can include development milestones, funding needs, token supply, holder rights, transfer restrictions, cybersecurity risks, financial statements and code that governs rights.

Commissioner Paul Atkins outlined personal ideas in March that included an illustrative $75 million fundraising cap in 12 months; he presented that figure as his own thinking rather than Commission policy. Separately, Congress has advanced legislative text that would create a statutory pathway. The Senate Banking Committee advanced H.R. 3633 and Senator Cynthia Lummis circulated draft language directing the SEC to create a Regulation Crypto with limits and disclosure requirements, including an exemption tied to the greater of $50 million per year or 10% of ancillary-asset value, subject to a $200 million aggregate cap and a 30-day notice of reliance. Those provisions would take effect only if enacted and followed by agency rulemaking.

Until the SEC reschedules the meeting or publishes a proposal on its meeting page or rulemaking index, issuers must continue to use existing registration and exemption routes. Investor eligibility, intermediary requirements, required disclosures and resale conditions will determine which token launches can proceed under current securities law.