SEC Commissioner Hester Peirce Supports New SEC Token Fundraising Rules
SEC Commissioner Hester Peirce supports the proposed framework of "Regulation Crypto Assets," calling it an important step towards establishing "clear, reasonable, and enforceable rules" for the issuance of crypto assets.
The proposal sets a startup exemption allowing eligible token issuers to raise up to $5 million in a one-time offering within four years; issuers must publish disclosure documents detailing the project, team, token functionality, use of funds, technical status, risks, and key management commitments.
Another financing exemption allows compliant issuers to raise up to $75 million every 12 months, but requires financial statements and ongoing reporting obligations. Both paths do not exempt issuers from anti-fraud, anti-manipulation, and liability requirements under federal securities laws.
The rules propose introducing an "investment contract safe harbor": when an issuer has completed or clearly permanently halted previously committed key management work and meets the declaration and disclosure conditions, the relevant crypto assets may no longer be continuously regarded as securities due to the original sales contract.
Peirce has long advocated for rulemaking to define the boundaries of the crypto market instead of relying on enforcement actions. Past controversies involving the SEC against Telegram, Ripple, Coinbase, and Binance focused on whether initial token sales, secondary trading, and platform functionalities constituted unregistered securities offerings or trading activities; this proposal attempts to separately address early issuance, ongoing financing, and asset status after network maturation.
In market mechanisms, early protocols and token issuers are the direct users of the new exemption paths, with investors exchanging capital for project tokens and potential network participation rights; law firms, auditing firms, disclosure tools, KYC services, issuance platforms, and custodians will bear compliance costs. The rules are still in the proposed stage and have not yet taken effect; if the final text retains the safe harbor and fundraising channels, capital will likely favor projects that can disclose progress, complete technical delivery, and establish verifiable governance mechanisms, while teams relying on regulatory ambiguity and pure narrative fundraising will face pressure.
Source: Public Information
ABAB AI Insight
Hester Peirce has continuously proposed the "Token Safe Harbor Proposal" since 2020, with the core idea of giving network developers a limited time to build decentralized networks while meeting disclosure and anti-fraud requirements, rather than blocking financing with traditional securities registration requirements at the startup phase. The proposed rules' startup exemption, financing exemption, and investment contract safe harbor continue her policy of distinguishing between "investment contracts at the time of fundraising" and "digital assets that can operate independently after maturation."
The capital path shifts from non-standardized private placements and offshore issuances to layered compliant financing. Small teams can utilize the four-year $5 million window to complete network development and product validation; issuers with auditing, financial, and ongoing disclosure capabilities can use the $75 million annual limit to expand financing. Capital will no longer only enter projects through SAFTs, foundations, or offshore entities, but will also flow into U.S. legal opinions, disclosure systems, token administrators, auditing, and investor suitability verification services.
This is similar to the logic of the 2012 JOBS Act opening Regulation Crowdfunding and Regulation A+ to establish simplified public offering channels for smaller-scale financing: regulation exchanges fundraising caps and disclosure obligations for lower issuance thresholds. The difference is that tokens can circulate in secondary markets, and the ongoing impact of network development teams on functionality delivery may determine asset value; therefore, the safe harbor sets "completion or permanent cessation of key management work" as the condition for exiting securities status, rather than merely using fundraising amounts as a boundary.
Essentially, it is a regulatory change. The core discount faced by token projects in the past was that financing activities could later be deemed unregistered securities offerings, leading to delisting from exchanges, investor exits, and enforcement risks for teams. If the rules are ultimately passed, this type of legal uncertainty will be priced as disclosure costs, fundraising limits, and development commitments: projects with stronger compliance capabilities can gain capital advantages, and market competition will shift from "who can list tokens faster" to "who can prove the network is capable of independent operation."
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