The Securities and Exchange Commission has quietly scheduled a rule that would let startups sell tokens without registering them as securities, according to agency sources. The move comes as the crypto industry fixates on a separate congressional bill that may never pass.
For seven years, the SEC sued token issuers, calling most sales illegal offerings. Now the same agency is preparing to open a legal pathway for those very transactions – and it can do so without a single vote from lawmakers.
The rule, expected to be published this month, would let early-stage projects raise capital by selling tokens directly to investors, bypassing the standard registration process that has been a major barrier for crypto startups. The SEC's authority to implement such a rule stems from existing securities laws, not new legislation.
Industry observers had pinned their hopes on the Token Taxonomy Act, a bill that would have provided similar relief but stalled in committee. The SEC's administrative action, while narrower in scope, does not require congressional approval and could take effect sooner.
For token issuers, the rule would remove a key legal uncertainty. Currently, most token sales risk being deemed unregistered securities offerings, exposing founders to fines and investor lawsuits. A clear exemption could revive a fundraising model that all but disappeared after the 2017 ICO boom and spur a new wave of blockchain projects.
The shift is striking for an agency that spent years arguing that nearly every token sale violated federal law. Critics will likely challenge the rule as an overreach, arguing it undermines investor protections. Supporters will call it a long-overdue recognition that rigid registration procedures stifle innovation.
The SEC has not released the full text of the rule. Market participants will watch for its publication in the Federal Register, which opens a public comment period before final adoption. The timing matters: a rule finalized before the election could face political headwinds, but one that arrives later might benefit from a friendlier administration.
SEC schedules rule letting crypto startups sell tokens without registration, no vote needed
The SEC has quietly scheduled a rule to allow startups to sell tokens without registration, potentially legalizing token sales starting in July. This indicates a more crypto-friendly regulatory approach despite uncertainty if the bill will pass.