Token offerings
Raising money by selling a crypto asset (a "token") that your project creates, before or after its network is running. In the US, a token sold with promises of the work you will do to make it valuable is usually part of a securities offering. The SEC set out new guidance in 2026 and has proposed new exemptions, but they are not final. Here is what is settled and what is not, as of October 20, 2026.
- No security
How it works
A token offering sells crypto assets to buyers to pay for building a project, often a blockchain network or an application that runs on one. Buyers usually get the token, not shares in your company.
What is settled (as of October 20, 2026):
- March 17, 2026: the SEC, joined by the CFTC, issued an interpretation that sorts crypto assets into digital commodities, digital collectibles, digital tools, stablecoins and digital securities. Only digital securities (tokenized securities) are securities in themselves.
- The same interpretation says a token that is not itself a security becomes subject to an investment contract when the issuer sells it by inducing an investment of money in a common enterprise, with representations or promises to carry out essential managerial efforts from which buyers would reasonably expect profits. The investment contract ends when the issuer has fulfilled those promises, or has failed to. Selling tokens to raise money for work you promise to do is the typical case.
- So, today, a token sale that is an investment contract must be registered with the SEC or fit an existing exemption, such as Regulation D, Regulation Crowdfunding or Regulation A, with their investor limits, filings and anti-fraud rules.
What is not settled:
- Regulation Crypto Assets: proposed by the SEC on August 18, 2026 and published in the Federal Register on August 21, 2026, with comments due by October 20, 2026. It would add two exemptions for investment contracts involving crypto assets: up to $5 million once in four years, and up to $75 million in each 12 months (with financial statements and ongoing reports), and a safe harbor under which a crypto asset is no longer subject to an investment contract once its conditions are met. It would preempt state registration of these offerings. It is a proposal and may change.
- Market structure law: on September 15, 2026, the Senate rejected, 49 to 50, a motion to end debate on proceeding to H.R. 3633, a bill to regulate the offer and sale of digital commodities through the SEC and the CFTC. There is no federal market structure statute yet.
Upsides and downsides
Upsides
- Can reach buyers who want to use or hold the network's token
- Can raise money without selling shares in the company
- New SEC guidance in 2026 has set out when a token sale is a securities offering
Downsides
- Most token sales to raise money are still securities offerings, with their limits and filings
- The tailored exemptions are only proposals, and market structure law has stalled
- High legal, technical and compliance costs
Risks
- Rules can change while you are mid-way through a sale
- Selling without registration or an exemption can give buyers a right to their money back with interest (rescission)
- Code bugs, hacks or failures at a platform holding the tokens
- The token's price collapsing, along with trust in your project
What it costs
- How it is priced
- Tokens sold to buyers, plus legal, technical and compliance costs
- Costs that are easy to miss
- Legal advice on whether the sale is an investment contract, and which exemption or registration it uses
- Building and auditing the token's code
- Ongoing disclosure and reporting under the exemption used
Set by the exemption used. The proposed Regulation Crypto Assets exemptions would allow $5 million once in four years, or $75 million in each 12 months.
Does it fit?
Could fit when
- Your product genuinely needs a token, such as a blockchain network where the token has a real use
Unlikely to fit when
- You simply need money for an ordinary business (shares or loans are far simpler)
- You need the money within weeks
- You need certainty about the rules before you raise money
Who can use it
- Business types: C corporation, LLC, Benefit corporation
- Open to businesses with no sales yet
- A token sale that is an investment contract must be registered or fit a securities exemption
- A token with a real use in your project or network
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all tokens and digital assets
0%
0 of 3 ticked
- Securities route chosen
- Token rights defined
- Code audit
Regulation and protections
Regulators: U.S. Securities and Exchange Commission (SEC); State securities regulators.
Who runs it: Private providers, nationwide.
A token sale that is an investment contract is a securities offering: registration or an exemption, disclosure and anti-fraud rules apply. Tokens that are not securities and not sold as investment contracts fall outside the securities laws; the CFTC said certain of them could be commodities under the Commodity Exchange Act.
Proposed SEC rules (Regulation Crypto Assets, comments due October 20, 2026) and stalled federal legislation could change this. Check the current position before you start.
Types of provider: Securities lawyers and auditors of token code; Registered funding portals and broker-dealers, for sales under Regulation Crowdfunding or Regulation A.
Also consider
What has changed
No changes since this page was published. It was last checked against its sources on October 20, 2026.
Sources
- SEC press release 2026-30: SEC clarifies the application of federal securities laws to crypto assets (March 17, 2026) · checked October 20, 2026
- SEC fact sheet, Release 33-11412: application of the federal securities laws to certain types of crypto assets and certain transactions involving crypto assets · checked October 20, 2026
- SEC: Crypto assets and the federal securities laws · checked October 20, 2026
- SEC press release 2026-76: SEC proposes new Regulation Crypto Assets (August 18, 2026) · checked October 20, 2026
- Federal Register: Regulation Crypto Assets, proposed rule (August 21, 2026, 91 FR 54510; comments due October 20, 2026) · checked October 20, 2026
- SEC: Consequences of noncompliance (rescission) · checked October 20, 2026
- US Senate: roll call vote 234, 119th Congress, 2nd session (September 15, 2026): cloture on the motion to proceed to H.R. 3633, rejected 49 to 50 · checked October 17, 2026
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